U.S. Rep. Kendrick Meek Urges Governor Charlie Crist to Call Legislature into Special Session if $444 Million in Recovery Dollars for Unemployment Insurance is Left on the Table During Current Legislative Session

WASHINGTON, DC – U.S. Rep. Kendrick B. Meek (D-FL) today wrote Governor Charlie Crist of Florida urging him to call the Florida Legislature into Special Session if $444 million in federal stimulus dollars meant to fund Unemployment Insurance (UI) are not utilized to help unemployed Floridians and their families.

The Republican-controlled Legislature in Florida to date has refused attempts by Democrats to pass legislation enacting the necessary reforms to access the federal stimulus dollars available to Florida.

In Meek's letter to Governor Crist, he wrote:  "If the Florida legislature is unwilling to reconsider and act in accordance with ARRA provisions before the end of the extended legislative session ending May 8, 2009, I urge you to call for a special legislative session … Florida taxpayers and businesses are suffering now. The Florida legislature must act now. For members of the legislature to put ideology over the people of Florida in their time of need is objectionable."

Congressman Meek first raised this issue on April 23 in a Ways and Means Committee hearing on this subject.  The exchanges are posted on YouTube and can be found here and here.

In order to be compliant, the State must implement two of a possible four reforms: (1) Extended UI while in Training; (2) Part-Time Worker Coverage; (3) Weekly $15 Dependent Allowance; (4) Compelling Family Reasons for Leaving Work (includes ALL 3 of the following provisions: Domestic Violence, Spouse Relocation; and Illness & Disability) and affirmatively take these steps:

(1) To receive 1/3 of the funding, the State must enact an alternative base period, which ensures that the last completed quarter of a worker's employment is counted when determining eligibility for unemployment benefits.  The Florida Agency for Workforce Innovation estimates that this will cost $51.3 million per year

(2) To receive the remainder of the funding, a State must enact 2 of 4 other provisions.

The Florida bills SB 516/HB 1333 reflect that Florida has chosen:

(1) The provision to permit former part-time workers to seek part-time work.  This is estimated to cost nothing.

(2) The provision to permit voluntary separations from employment for compelling family reasons.  The estimate for this is $22.4 million per year.

SB 516/HB 133 cost estimates are $74 million per year approximates the Florida Agency for Workforce Innovation.

The $444.3 million grant would cover more than 6 years of these costs.

The National Employment Law Project (NELP) calculates that the added UI Modernization funding could have the effect of slashing the potential tax increase on impacted employers by $105.6 million.  This is a 20% reduction from the expected $528 million increase in taxes. According to the National Employment Law Project, the projected infusion of federal money into the state's unemployment insurance trust fund would lower expected increases to UI taxes by $105.6 million.

Unlike in Florida, Georgia was able to pass legislation to enact the necessary reforms, with Governor Sonny Perdue and the Republican-controlled Legislature working across party lines to receive its share of UI stimulus dollars by legislatively working together to be compliant with the guidelines set forth in the American Recovery and Reinvestment Act.

On April 29, the St. Petersburg Times editorialized on this subject, writing: "With Florida's unemployment rate at a 30-year high, it's impossible to fathom why state lawmakers may forgo collecting $444 million in federal unemployment compensation for those out of work. But that is what the Legislature's cold-hearted Republican leadership is poised to do as the annual session winds to a dismal close. Florida, once again, won't get its fair share of federal largesse just when its economy and its residents need it most."

A copy of Congressman Meek's letter to Governor Crist appears below:

May 1, 2009

The Honorable Charlie Crist
Governor, State of Florida
The Capitol
400 S. Monroe Street
Tallahassee, Fl  32399-0001

Dear Governor Crist:

I am writing again regarding Florida's non-compliance with the Unemployment Insurance (UI) modernization provision of the recently enacted American Recovery and Reinvestment Act, this time to urge you to, should it become necessary, call the Florida Legislature back into Special Session to reconsider and enact the necessary legislation.

As the ranks of the unemployed continue to swell around the country with monthly job losses exceeding 600,000, there are now nearly four jobless workers for every job opening in today's labor market. Florida's unemployment rate for March, 2009 has surged to 9.7 percent, the highest unemployment rate since 1976.  This alarming figure represents 893,000 jobless out of a workforce of 9,210,000, nearly 1 in 10.

The Federal Government is willing to give Florida $444.3 million to use to help this situation, paying for nearly six years of benefits for struggling Floridians who are currently not covered under Florida unemployment law.  Yet the Florida Legislature continues to leave this money on the table by their refusal to enact the necessary legislation that would make Florida compliant with the UI modernization provision. Inaction harms not just hard-working taxpayers who fall through the cracks of the unemployment system, including part-time workers, parents with spouses deployed overseas, and the long-term unemployed, but also struggling state employers when they need the help most.

With unemployment rising, the projected balance in the Unemployment Compensation Trust Fund on June 30, 2009 will trigger a tax rate increase that will become effective January 1, 2010. Yet, the National Employment Law Project (NELP) and the Florida Center for Fiscal & Economic Policy projects that if Florida acts quickly and is able to add funds to the trust fund before June 30th, it would reduce the shortfall between the fund balance and the trigger amount. This would significantly curtail the tax increase required in Florida to help replenish the fund in 2010.  NELP calculates that the added UI modernization funding could have the effect of reducing the potential tax increase on impacted employers by $105.6 million.  This is a 20 percent reduction from the expected $528 million increase in taxes.

While Florida is expected to make a good faith effort to comply with the UI provisions, the Florida Legislature has the option to repeal these provisions in the future if they should so choose, and Florida would not have to pay back the $444.3 million. I personally solicited this information from Mr. Ray Uhalde, Senior Advisor to the Secretary, United States Department of Labor and, separately, from Mr. Michael L. Thurmond,  Commissioner, Georgia Department of Labor during the April 23rd Ways and Means Committee hearing on the subject. (Video logs of this testimony are viewable on my Congressional website at kendrickmeek.house.gov.)

If the Florida legislature is unwilling to reconsider and act in accordance with ARRA provisions before the end of the extended legislative session ending May 8, 2009, I urge you to call for a special legislative session and include within that call reconsideration of this important issue before the June 30th trigger. Florida taxpayers and businesses are suffering now. The Florida legislature must act now. For members of the legislature to put ideology over the people of Florida in their time of need is objectionable.

Please feel free to contact me for any details related to the April 23rd Ways and Means Committee hearing.

Sincerely,

/s/

KENDRICK B. MEEK
Member of Congress

Open Letter

CC:

The Honorable Jeff Atwater, President of the Florida Senate
The Honorable Larry Cretul, Speaker of the Florida House of Representatives
Mr. Mark A. Wilson, President and CEO, Florida Chamber of Commerce
Mr. Barney T. Bishop, President and CEO, AIF
Ms. Cynthia "Cindy" Hall, President, Florida AFL-CIO

U.S. Rep. Kendrick B. Meek represents the 17^th Congressional District of Florida which includes parts of Miami-Dade and Broward Counties. He serves as the lone Florida Democrat sitting on the House Committee on Ways and Means.

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