Panel OKs benefits cut for jobless

Posted: February 15, 2017 at 2:02 a.m.

Out-of-work Arkansans would receive less money in unemployment benefits and would be eligible for fewer weeks of the payments under a bill that cleared a House committee Tuesday.

House Bill 1405, sponsored by Rep. Robin Lundstrum, R-Elm Springs, would also reduce unemployment insurance taxes paid by employers.

Starting in 2018, businesses would pay taxes on up to $10,000 in annual wages for each worker, down from $12,000 under the current law.

Meanwhile, the maximum amount of time Arkansans can receive unemployment benefits would fall from 20 weeks to 16 weeks.

The weekly benefit would be calculated by dividing the laid-off employee's average quarterly pay by 30 instead of by 26.

For instance, for a worker who earned $30,000 a year, that change would reduce the weekly benefit from $288 to $250.

Lundstrum said the bill would give relief to employers who "answered the call" and agreed to an increase in unemployment insurance taxes in 2009.

"Our employers are being overtaxed, and this would reduce that," Lundstrum said.

The reduced benefits, she added, would encourage people to find jobs more quickly. She noted that the state's unemployment rate fell to 3.9 percent in December from 4 percent in November.

In the metropolitan area including Fayetteville, Springdale and Rogers, the rate was even lower -- 2.7 percent.

"This would help answer the call for employers who are also begging, begging for people to come to work," Lundstrum said.

The House Public Health, Welfare and Labor Committee recommended passage of the bill in a divided voice vote.

Jessica Akers Hughes, secretary treasurer of the Arkansas AFL-CIO, said the union supports reducing the employer taxes, but not the benefits.

She noted the state reduced the time limit on benefits by five weeks in 2015 and by a week in 2011.

Act 141, signed by Gov. Asa Hutchinson last week, will also collect state income taxes on unemployment benefits while exempting military retirement benefits from the tax.

Akers Hughes said such measures will discourage skilled workers from living in the state.

"Some people feel that they can tax benefits and starve unemployed workers into whatever job they can find," she said. "We would like to bring better jobs to communities so that we don't have to starve them into a low-paying job."

Arkansas Advocates for Children and Families also opposes the bill, Ellie Wheeler, a senior policy analyst with the group, said.

While the overall unemployment rate is low, jobs are harder to find in some parts of the state than others, she said.

"We feel like this would not be a good choice for protecting the needs and interests of kids and families in Arkansas," Wheeler said.

Business on 02/15/2017