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TN GOP bill looks to cut unemployment benefit weeks from 26 to 12

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Posted at 8:12 PM, Apr 08, 2021
and last updated 2021-04-08 21:42:31-04

NASHVILLE, Tenn. (WTVF) — GOP legislators have proposed a bill that could cut the number of unemployment benefit weeks by more than half.

Rep. Kevin Vaughan (R) District 95, sponsored HB 1039, and Sen. Art Swann (R) District 2 sponsored SB 1402. Both have quietly made it through subcommittees with approvals.

Neither legislator responded to our request for comment on the bill that would take effect July 2023, but House Speaker Cameron Sexton said he supports what this bill hopes to accomplish.

“What we’re doing is we're making our unemployment weeks based on our unemployment rate. The lower it is, the fewer weeks it is,” Sexton said.

Sexton followed those comments by saying this will mirror legislation passed by other states, but it appears this change would do more to set Tennessee apart.

Instead of 26 weeks, which more than 40 other states and territories offer, Tennessee would have 12 weeks of unemployment benefits. The shortest length of time of any state in the country.

Tennesseans could get more time, but it all depends on the state’s average unemployment rate. If the rate is 5.5 percent or higher, claimants get another week for every half percent it’s above that threshold with a max of 20 weeks. The state's current unemployment rate sits at 5.1 percent.

Claimants would also get an extra $5/week. Sexton says that number is still up for debate, but it’s not exactly what Kimberly Hunter had in mind when she heard of a fix to unemployment.

“It’s just not enough time with the wait involved,” Hunter said.

Hunter is self-employed and for many like her, she can’t just take any job. She says small business owners like herself rely on this money to make it so they can hire again.

“There’s a lot of small businesses who help other people by giving them jobs, so they need to take a moment and ask us. Ask us what we need so we can help you all understand the troubles that we’re having,” Hunter said.

Rep. Faison and other GOP leaders say the reason businesses are suffering is that potential hires would rather stay home and collect unemployment.

“We’re encouraging people to just sit still, instead of being productive,” Faison said.

Sexton added that “a secondary problem we have is the federal government sent in that extra $300 a week where people were making more money on unemployment than they were making when they were working.”

The pandemic extended Tennessee's 26 weeks of benefits to practically the entire year after the CARES Act. Offering more money, to more people like Hunter who otherwise may not have qualified for unemployment.

It’s money that was made available by the federal government, which put into question why this new legislation by the GOP was necessary.

A fiscal memo by the Tennessee General Assembly Fiscal Review Committee helped to shed light on the implications of cutting the benefits weeks.

Under “assumptions for the bill as amended,” the committee suggests that the state would save between $31 to $36 million every year that otherwise would have gone to the Unemployment Insurance Trust Fund.

Other assumptions made by the committee say that this bill would, “result in a decrease in business revenue as a portion of the unemployment insurance payment would have been re-spent in the economy.”

Further down the same page and the committee highlights how this change may result in lower premium payments for businesses for unemployment insurance. The last line of which mentions there being “no significant impact to jobs in Tennessee.”

These are all assumptions, according to the committee. All were made after using data provided by the state Department of Labor and Workforce Development.