Arizona Republicans are moving forward with legislation to increase the state’s unemployment benefits payouts but with several reforms they say would root out fraud and incentivize a return to the workforce.
An amended Senate Bill 1411, sponsored by Senate President Karen Fann, R-Prescott, would increase the state’s maximum weekly unemployment benefit to $320, up from $240. It would rise again to $400 when the state’s unemployment trust is sufficiently funded.
The bill was approved Tuesday on a bipartisan basis in the Senate Appropriations Committee. It also would increase the income disregard, or income an unemployed person can earn before their benefits stop, to $160.
“It keeps the employee engaged at the workforce,” Fann said. “It’s kind of like school. If you drop out of school, it’s very difficult to get them to go back in. But, if they keep engaged with their workforce colleagues, if they feel like they’re part of that whole world, they are more likely to go back to work.”
Arizona has one of the nation’s lowest caps in unemployment benefits. While it means less money for unemployed workers, a low cap means lower costs for small and medium-sized businesses that are the state’s primary employers.
Fann said it’s beneficial to keep the worker coupled to their former job, saving the employer the potential cost of hiring and training a new worker.
The bill also would raise the cost of unemployment taxes that businesses pay, albeit by $2,000 over two years. While it would increase the cost to businesses, many of the state’s business associations took no position on the bill.
“We’re trying to do a responsible thing here by encouraging people to act responsibly, to be there when they need us, but then they’ve got to do their part as well,” Fann said.
Democrats, who previously called for a special session amid the pandemic to raise unemployment payouts, took issue with reducing the total number of weeks in allowable benefits from 26 weeks to 20 weeks if the state unemployment rate falls below 6%.
“We’re still in the middle of a public health crisis,” said Sen. Tony Navarrete, D-Phoenix. “I’m not sure that it sends a really good message from the state legislature where we are in the process of moving unemployment insurance from 26 weeks to 20 weeks.”
One of Gov. Doug Ducey’s pandemic executive orders would require a longer timespan of benefits.
In terms of unemployment fraud, the bill includes new safeguards that would require further verification of the unemployed person’s identity. This wasn’t enough to convince Sen. Michelle Ugenti-Rita, R-Scottsdale, to vote for the measure. She said the state still would pay people not to work, rather than paying them to find other work.
There is a similar bill in the opposite chamber. House Bill 2805 would raise the cap to $300 a week and contains similar but not identical provisions.
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