Leaders in the Tennessee General Assembly are backing a proposal to reduce the number of weeks residents can draw unemployment benefits while boosting the weekly payout by $25 or $50.
According to Republican lawmakers, the goal of the move is to push people back to work amid ongoing recovery from the COVID-19 pandemic, which left hundreds of thousands of Tennesseans without jobs.
As written, the legislation would not go into effect until December 2023, in part because state officials have told legislative sponsors that it will take that long to acquire and put into place new software systems required for the change.
The payout maximum would be indexed to the statewide unemployment rate. When the unemployment rate averages 5.5 percent — about where it sits now, but higher than it had been prior to the pandemic — benefits would be capped at 12 weeks. For every 0.5 percentage points the rate increased, the number of maximum payout weeks would increase by one, up to 20 weeks.
“Right now, whether you’re in a good economy or a bad economy you can get up to 26 weeks,” House Speaker Cameron Sexton (R-Crossville) said last week. “We don’t think that makes good policy sense.”
COVID upended the state’s unemployment insurance program. In the weeks prior to widespread business closures in March 2020, Tennessee officials reported paying around 16,000 claims. It soon jumped to six figures, with the number of payouts staying north of 300,000 for six weeks in April and May of last year. It steadily decreased after reaching the peak but has hovered between 41,000 and 58,000 weekly recipients since November.
Though the bill aims to increase weekly payouts by $25 or $50, the state’s current maximum payout is $275 weekly. Federal stimulus plans have bolstered that payout in recent months.
“It will help people because it puts more money in their pocket right up front,” Sen. Jon Lundberg (R-Bristol), the Senate sponsor, said during committee debate last week. “For businesses, it gives them an opportunity to hopefully attract some people and get people working.”
Several Republican backers cited stories from business owners in their districts who have reportedly found it difficult to hire workers in recent months. Supporters of the legislation blamed the enhanced federal unemployment payout, though Senate Finance Chair Bo Watson (R-Hixson) allowed that “I don’t know that you can do a direct cause and effect” between the two.
The Senate Commerce and Labor Committee recommended passage of the legislation, with only Democratic Sen. Raumesh Akbari voting against recommendation and Republican Sen. Art Swann abstaining. The Senate Finance Committee is scheduled to consider it on Tuesday, and it is currently “behind the budget” in the House — a designation for legislation that can be heard after House committees take up other budget-related bills.
“I don’t think anyone’s trying to make a living off unemployment benefits; it truly does give folks an opportunity to find a job,” Akbari said. “Coming out of something like the COVID pandemic, to reduce benefits at this point, I just don’t know why we’re moving in this direction.”