MacIver News Service | July 19, 2011[Madison, Wisc…] A Senate amendment passed Tuesday afternoon could eliminate a proposed one-week waiting period on unemployment benefits, which could cost the state in excess of $50 million a year from unemployment benefit fraud and lost administrative savings.
The bill before the Senate Tuesday would allow the state to accept federal funds to extend unemployment benefits to recipients for another 13 weeks. That extension would be funded mostly by the federal government, but would also require a contribution from Wisconsin employers. It would not, however, add to the loan balance with the feds.The Senate approved the extension Tuesday by a vote of 30-3, with Republican Senators Grothman (West Bend), Lazich (New Berlin) and Zipperer (Pewaukee) voting no after the body added an amendment removing a required one-week delay in receiving benefits.
The amendment undid a change in state law that was included in the just-passed state budget. That amendment could cost between 41 and 56 million dollars, annually. The Assembly had been expected to approve the plan on Wednesday. Governor Scott Walker had indicated he was prepared to sign the original proposal, which was recommended by the Unemployment Insurance Advisory Council earlier this year.
“The extended benefits will help the worker out. The one-week waiting period actually helps the department out,” Secretary Scott Baumbach, Department of Workforce Development, told the MacIver News Service earlier. “It actually ends up saving us about $50 million a year, because if you look at the first week when a termination or a resignation occurs, it gives the department the opportunity to evaluate what is that particular employee owed, if anything. It cuts down on over payments. It cuts down on fraud.”
During the floor debate, Democrats criticized the waiting period.
“The one week waiting period was a 55 million dollar highway robbery of workers without any recommendation from the advisory council,” said Senator Bob Jauch (D-Poplar).
However, Baumbach explained to the MacIver News Service, “It doesn’t mean that the employee loses a week. It actually shifts to the back end.”
Andrew Welhouse, Senate Majority Leader Fitzgerald’s spokesman, said even though the amendment was approved by the Senate, it is not yet set in stone.
“It was put in because our senators are trying to work together to get to the right answer to help people who are out of work and struggling,” Welhouse said. “There are still a lot of discussions back and forth between the Assembly, the Governor’s Office, and the Senate about this specific issue.”
Senator Rich Zipperer, (R – Pewaukee) objected to the change, saying “this will increase the cost of the bill without any plan to pay for it. We are trying to restrain spending and pass balanced budgets in Wisconsin and this change goes in the other direction.”
The Department of Workforce Development hoped the $50 million could be used toward paying back the $1.3 billion the state burrowed from the federal government for unemployment benefits. As MNS reported earlier, Wisconsin’s unemployment reserve fund has been insolvent for over two years.