Unemployment Insurance Fund Reform Passes!

Today the House of Representatives voted unanimously to pass House Bill 6633, An Act Restructuring Unemployment Insurance benefits and Improving Fund Solvency.

As ranking member of the Finance Committee, I commend both sides of the aisle for rolling up their sleeves and not letting the perfect be the enemy of the good. This bill takes lessons learned from the past to help us avoid a looming unemployment financial crisis and creates meaningful steps towards long-term fund stability.

The Unemployment Trust Fund, supported by state unemployment taxes paid by employers, has been insolvent for 48 out of the last 50 years, requiring the state to borrow money from the federal government. During the 2008 Great Recession, Connecticut borrowed over $1 billion to replenish the fund and took Connecticut businesses an agonizing six years to repay that debt.

Due to COIVD-19 pandemic job losses, Connecticut borrowed over $700 million from Washington to replenish the fund, with projections reaching as high as $1 billion.

Key components of this bill:

• Increases the taxable wage base from $15,000 to $25,000;
• Reduces the maximum solvency tax rate from 1.4% to 1%;
• Reduces the minimum and expands the maximum experience tax rate, from 0.5-5.4% to 0.1-10%;
• Increases the minimum base period earnings required to qualify for unemployment benefits from $600 to $1600;
• Delays four annual $18 increases in the maximum weekly benefit amount;
• Defers UI benefits until the end of any severance payments for all employees.

Republicans recently offered an alternative spending plan for nearly $3 billion in federal aid Connecticut stands to receive from the American Rescue Plan. The House Republican plan would allocate $400 million to the fund while the governor’s plan would allocate $50 million.

Click here to view the House Republican spending plan