Florida to cut state unemployment benefits

@CNNMoney May 10, 2011: 5:24 AM ET
Unemployed Florida residents would receive fewer weeks of jobless benefits next year under bill awaiting the governor's signature.

Unemployed Florida residents would receive fewer weeks of jobless benefits next year under bill awaiting the governor's signature.

NEW YORK (CNNMoney) -- Florida residents would no longer get up to 26 weeks of state unemployment benefits come 2012, under a bill state lawmakers approved late last week.

The number of weeks the jobless would receive would depend on the state's unemployment rate. Florida would be the first state to tie the two together, though three other states have cut back their benefits in recent weeks.

Governor Rick Scott is expected to sign the bill soon.

The bill would slash unemployment benefits to a maximum of 12 weeks if the unemployment rate is at 5% or below. The most Floridians could get is 23 weeks, if the unemployment rate is 10.5% or higher.

The state's unemployment rate stood at 11.1% in March, the third highest in the nation.

Florida lawmakers are cutting benefits to blunt the massive increase in unemployment taxes that's looming for businesses. Companies were scheduled to pay a minimum of $206.55 per year in 2012, up from $72.10 this year. Under the bill, they would save $32.10 per worker next year.

Companies will be less likely to relocate to or expand in Florida because of the tax hike, said Rep. Doug Holder, who sponsored the legislation. The bill will entice them to grow in the Sunshine State, he said.

"It gives the message that Florida is trying to become the most business-friendly state in the country," Holder said.

But the legislation greatly concerns advocates for the unemployed, who say that it decimates a safety net that's been in place for 60 years.

"It's very minimal protection and far below what workers are receiving in the rest of the country," said George Wentworth, senior staff attorney at the National Employment Law Project.

The bill also imposes additional hurdles on the unemployed. They must complete an initial skills assessment and, once they start collecting benefits, the jobless must submit reports that show they've either reported to a state career office or contacted at least five employers.

Also, Florida residents would lose part of their federal unemployment insurance, which is tied to state benefits, Wentworth said. If Florida only pays for 20 weeks of benefits, for instance, residents would only get 53 weeks of federal benefits, instead of 73 weeks.

States around the country are looking for ways to minimize unemployment tax hikes on businesses. Michigan and Missouri recently cut their state benefits to 20 weeks, while Arkansas loped a week off of its unemployment compensation.

The levies are rising because states had to borrow money from the federal unemployment insurance trust fund to cover the surge of claims during the Great Recession. Businesses will ultimately have to pay back the $43.3 billion owed to the federal fund through taxes.

Unemployment tax revenue is expected to rise by 16.5% on average this year, according to the National Association of State Workforce Agencies. To top of page

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