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Published: Monday, 4/11/2011

Benefits cut short

THE recession has battered Michigan especially brutally; its jobless rate has stayed in double digits longer than any other state's. So a new law that mandates a shorter duration for unemployment benefits than in any other state seems especially harmful.

Under the law, passed by the GOP-controlled Legislature and signed by Republican Gov. Rick Snyder, Michigan will stop paying jobless workers after 20 weeks starting next year, down from 26 weeks. Every other state still provides 26 weeks of benefits, but several are considering legislation similar to Michigan's.

The ostensible goal is to limit taxes on businesses. When the economy tanked and joblessness surged across the nation, unemployment-insurance funds in many states, including Michigan, were wiped out. Those funds took tens of billions of dollars in federal loans to stay solvent.

Michigan borrowed nearly $4 billion, the second-largest debt behind California's. The loans eventually must be repaid out of taxes on employers.

President Obama's budget proposal would suspend repayment of interest on those loans for two years. After that, Michigan's tax on employers for unemployment costs would rise.

Michigan lawmakers cut that tax back in 2002 -- one reason the state unemployment fund became depleted. Now, though, jobless workers will have to pay.

Governor Snyder claims he would have preferred to keep standard jobless benefits at 26 weeks. But he said he had to reduce that schedule so that some long-term unemployed Michigan workers can continue to receive as much as 99 weeks of extended federal benefits.

Those benefits also are set to expire next year, creating a trade-off that neither Michigan nor any other state should have to make. Lansing and Washington need to work together to find a better way to balance the preferences of businesses with the needs of jobless workers.



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