Senate votes to reduce unemployment payments

How long Georgians can receive unemployment benefits would be cut by as much as half under a bill passed Friday by the Senate.

The vote came despite a warning by the General Assembly's chief lawyer that it could be ruled illegal. And it antagonized some of the very people most affected by the state's doggedly high unemployment rate: those without jobs.

"It makes me irritated, if not angry, because it's blatantly obvious the Republicans in the state Legislature are playing politics in order to gain votes in the upcoming election," said Matt Leger, a graphic designer, writer and production artist who has been collecting unemployment since September. "They should not be balancing the budget on the backs of the unemployed in Georgia, because it happens that I'm one of them."

But Georgia needs to repay more than $700 million it borrowed from the federal government to pay unemployment benefits during the Great Recession. Supporters of Senate Bill 447 say they are trying to do that without putting too much pressure on businesses still trying to recover.

SB 447 would delay distributing the first unemployment check by a week, starting July 1. Payments would then drop from 26 weeks to a sliding scale of 12 to 20 weeks. It also would increase the amount taxed for unemployment insurance.

Georgia's unemployment rate stands at about 9.7 percent, above the U.S. jobless rate of 8.3 percent in January. The funding for unemployment insurance benefits comes from taxes paid by employers. Those already receiving benefits, such as Leger, would be grandfathered in, but anyone making new claims would be affected.

When a person becomes unemployed, he or she files for state unemployment benefits. Once the state benefits are exhausted, the federal benefits kick in. This week, President Barack Obama signed a federal extension of unemployment benefits that would take them through the end of 2012.

Senate Republicans backed the state bill largely along party lines, but they cautioned anyone assuming they did not care for people or had no idea how devastating layoffs or job loss could be.

"I have stood in front of a room full of people I love and said, ‘You haven't done anything wrong, but your jobs are gone,' " said Sen. Charlie Bethel, R-Dalton, an attorney who works in that area's carpet industry. "It's one of the worst things I've ever done."

The bill aims to give the state more financial flexibility as it repays the federal government.

"Today, we have a crisis that ultimately jeopardizes the long-term viability of our unemployment fund," Bethel said. "It should hurt. It will hurt. But it is responsible. We don't live in a world where we don't pay our debts in Georgia."

The debate on the Senate floor seesawed for nearly two hours, with Democrats failing in attempts to amend the bill to lessen the blow.

Sen. Fran Millar, R-Dunwoody, who sponsored the bill, warned that companies couldn't shoulder the whole burden to help pay back the money. Passing the bill, he said, could encourage companies to hire because they wouldn't face that extra expense.

But Democrats balked, saying Millar was forcing the financial burden of payments onto workers. They also sought an opinion from legislative counsel Wayne Allen, about whether Millar had overstepped bounds by introducing the bill in the Senate.

It was a suspicion Allen confirmed in a letter to Senate Minority Leader Steve Henson, D-Tucker. Allen said the bill essentially involved raising revenue, in this case to pay back borrowed money. "In my opinion, such legislation is a revenue bill which must originate in the House of Representatives" as required by the state constitution, Allen wrote.

Based on that opinion, Henson appealed to Lt. Gov. Casey Cagle to stop the bill. Cagle, who presides over the Senate, declined.

Millar and other Republicans asserted the payments would go directly into the state's unemployment insurance trust fund, not into the state treasury. "Which is why this is not a revenue bill," Millar said.

Millar has estimated Georgia could pay off the debt and rebuild the unemployment fund to $1 billion by 2014.

Opponents of the bill wanted to know why the state would cut unemployment benefits in the worst economy in a generation. They also noted that companies have been given billions of dollars in tax cuts, including an unemployment tax holiday from 2000 to 2003. Henson said Georgia could just as easily lose jobs without the bill.

"Over 75 percent of the burden of this bill is on workers, who are unemployed through no fault of their own," he said. "Employers have a certain obligation ... to now step up to the plate."

Sen. Nan Orrock, D-Atlanta, said passage would cost the state in other ways, as "we turn to the churches, we turn to Medicaid, we turn to food stamps" to make up for benefits lost under the bill.

"It's an insult to struggling families in Georgia to take this action," she said.

SB 447 passed on a 34-13 vote. It now goes to the House for consideration.

Unemployment benefits

How a proposed move to cut benefits would affect the unemployed.

Today unemployed Georgians get:

  • $330 maximum weekly benefits.
  • A maximum of 26 weeks of payments.
  • Immediate eligibility upon filing.

If SB 447 passes, unemployed Georgians would get:

  • $330 maximum weekly benefits.
  • Twelve to 20 weeks of payments.
  • A one-week wait before eligibility begins.

What's next:

SB 447 will head to the Georgia House, where lawmakers would have to pass a version of it. Any differences between the House and Senate versions would then have to be settled before heading to Gov. Nathan Deal for his signature.