More on Using the Unemployment Insurance Trust Fund for Stimulus

In a Senate Labor, Commerce, and Consumer Protection Committee hearing, lawmakers heard public testimony on SB 5319, which taps the unemployment insurance trust fund to support "economic stimulus." It's part of the governor's stimulus package. Among business groups testifying against the proposal were AWB and the Washington Roundtable, founding WashACE members.

Continuing themes raised in this Olympia Business Watch post, AWB president Don Brunell wrote the governor yesterday urging her to keep the UI Trust Fund intact. The News Tribune's Joe Turner has the press release.

The $4 billion in the reserve account is held in trust to insure workers receive their benefits when they lose their jobs through no fault of their own.?We need to learn from history. In 1982, our state?s unemployment rate rose to more than 12 percent, depleting the unemployment fund. If lawmakers divert funds from the UI trust account, the money may not be there when people need it,�� warned Brunell.

?Proposals may be well-intentioned, but we continue to worry about the long-term consequences if our economy continues to erode,�� Brunell said.?We need to be cautious because we just don?t know how many jobs will be lost this year.��

Also in The News Tribune's editorial page blog, Patrick O'Callahan makes a solid argument for not rushing to spend UI Trust Fund dollars to other purposes. Acknowledging that there's not nearly enough in the fund to jump-start the economy, he writes that the proposal may still do some good. More important:

Before approving [the legislation], lawmakers should give a hearing to the employers who?ve been on the hook to finance the trust fund.

...Its size is an argument for drawing it down some. But it?s also an argument for listening to employers who feel the state has been levying excessively high payroll taxes all along. They deserve a say before the Legislature changes the rules on how the money is spent.

And, as the business leaders said yesterday, the major Unemployment Insurance issue before the Legislature this year is getting back into compliance with federal policy.

MORE Rich Roesler has more the business response and a link to Brunell's letter.