State Senate approves legislation to cut maximum jobless-aid length

House Bill 1405 lops off four weeks, sets four-month cap

The Arkansas Senate on Monday handily approved legislation reducing from 20 to 16 the maximum number of weeks for which people are eligible for unemployment benefits.

House Bill 1405 by Rep. Robin Lundstrum, R-Elm Springs, also reduces from $12,000 to $10,000 the taxable wage base of an employee on which businesses pay unemployment taxes.

The Senate’s 25-7 vote on HB1405 sent the bill to the House for consideration of a Senate amendment.

The state’s unemployment trust fund has about $520 million, Steve Guntharp, an assistant director of Workforce Services, said in an email. The Department of Workforce Services paid unemployment benefits to about 9,217 people during the week ending March 11, and the average weekly benefit is $261. Since the manner of calculating the weekly benefit is not changed by HB1405, there should not be an impact on the average weekly benefit amount, he said.

The bill would begin to return the state’s unemployment benefit structure to what it was before the 2009 recession by reducing the maximum time people are eligible for unemployment benefits, said Senate Republican leader Jim Hendren of Sulphur Springs.

People spend an average 13 weeks on unemployment benefits, he said.

The legislation “also changes the ability to double dip,” so if a worker gets two months of severance payments, he also wouldn’t receive unemployment benefits during the same period, he said.

The state collected $309.6 million in unemployment taxes in calendar year 2016; collections would fall by about $47 million under HB1405, Guntharp said in his email.

Hendren said the legislation is a pro-business and pro-economic growth bill that will help fill jobs.

But Sen. Linda Chesterfield, D-Little Rock, told senators “we’ve got to stop sticking it to the little guy, and once more that’s precisely what we are doing with this bill.

“We are now going to cut back the amount of time that they have to find their job,” she said.

“There are employment deserts across the state of Arkansas.”

Hendren countered that he’s an employer who pays unemployment taxes and his reduced costs would allow him to raise wages, and he hopes businesses will use the reduce taxes to raise their employees’ salaries.

“We have created a lot of jobs and we need to continue to create jobs,” he said.