Gov. John Bel Edwards has approved a plan to stabilize Louisiana’s unemployment insurance fund, agreeing to increase the fund’s balance to $750 million to ensure businesses won’t have to pay higher taxes to replenish the fund.
Edwards last week signed legislation containing a state budget allocation of $500 million to stabilize the Louisiana Unemployment Insurance Trust Fund. The state Legislature also unanimously passed House Bill 192, sponsored by Rep. Jerome Zeringue (R-Houma), to shield businesses from financial burdens arising out of the coronavirus pandemic.
State unemployment trust fund benefits have been the object of litigation during the pandemic. The fund pays a maximum of $275 a week to laid-off workers, one of the lowest jobless benefit amounts in the nation.
For business associations, stabilizing the unemployment insurance fund was among their top legislative priorities this year.
“HB 192 established that the Louisiana Workforce Commission (LWC) would retain the present structure for determining benefits and taxes for calendar year 2023,” Dawn McVea, the National Federation of Independent Business’ senior state director, told the Louisiana Record in an email. “We supported this measure along with the appropriation of $500 million to the Unemployment Trust Fund to ensure that small business owners don’t face higher taxes next year as a result of continued recovery from the pandemic shutdowns. …”
The Louisiana NFIB expressed hope that the fund would return to a healthy state by 2024, when other long-term reforms to the system could be considered.
“We also supported HB 622 by Rep. (Beau) Beaullieu to help weed out fraud in the system (by) requiring the LWC to check UI rolls against weekly death records,” McVea said. “Stopping the bleeding of the fund is paramount to getting it stabilized both for employers who pay into it and for the people who really need it.”
Business associations have argued that small firms that are trying to cope with high inflation and rising labor costs should not also be socked with higher unemployment taxes to stabilize UI funds.
“We were proud to be a part of a coordinated effort between the Legislature and the administration to make the most significant infrastructure investment Louisiana has seen in decades,” Stephen Waguespack, president of the Louisiana Association of Business and Industry, said in a prepared statement. “In addition, stabilizing the Unemployment Trust Fund to prevent higher taxes on businesses … and prioritizing education and workforce development were key issues this session.”