CT House passes bill to restore depleted unemployment insurance trust fund
The Connecticut House of Representatives has voted unanimously to approve legislation that will restore the unemployment insurance trust fund.
The bill, HB 6633, now heads to the Senate.
As previously reported, the trust fund has been insolvent for 48 of the last 50 years, forcing the state to borrow money from the federal government during economic downturns. During the Great Recession, Connecticut borrowed $1.25 billion from Washington, a debt repaid with $85 million in interest over six years.
During the current recession, Connecticut has borrowed $712 million and counting ”“ another debt it will repay with interest as the economy struggles to recover.
Key components of the bill include:
- Increasing the taxable wage base from $15,000 to $25,000.
- Reducing the maximum solvency tax rate from 1.4% to 1%.
- Reducing the minimum and expanding the maximum experience tax rate, from 0.5-5.4% to 0.1-10%.
- Increasing the minimum base period earnings required to qualify for unemployment benefits from $600 to $1,600.
- Delaying four annual $18 increases in the maximum weekly benefit amount.
- Deferring unemployment insurance benefits until the end of any severance payments for all employees.
“As ranking member of the Finance Committee, I commend both sides of the aisle for rolling up their sleeves and not letting the perfect be the enemy of the good,” state Rep. Holly Cheeseman said. “This bill takes lessons learned from the past to help us avoid a looming unemployment financial crisis and creates meaningful steps towards long-term fund stability.”
“This measure provides long-term solvency for the fund, which ensures our residents who need this assistance have it in the future, and our employers have predictability when it comes to their contributions,” Gov. Ned Lamont said. “I look forward to the state Senate taking action on this bill so that I can sign it into law.”