(Oklahoma City, April 2, 2009): A new issue brief from Oklahoma Policy Institute calls on Oklahoma to take advantage of opportunities provided in the federal stimulus bill to make modest changes to its Unemployment Insurance program that would bolster the program’s financial condition and help avert or minimize tax increases and benefit cuts in the years ahead.
With Oklahoma’s unemployment rate rising and an increasing number of laid-off workers claiming jobless benefits, the state’s Unemployment Insurance (UI) Trust Fund balance is dropping rapidly. The Fund balance has declined by $100 million since August 2008. To keep the UI Trust Fund solvent, Oklahoma law established “conditional factors” which levy automatic tax increases on employers and benefit cuts on jobless workers.
Fortunately for Oklahoma, a provision passed by Congress in February as part of the stimulus bill could provide Oklahoma with an additional $75.9 million in federal dollars that would bolster the solvency of the state’s UI Trust Fund and help avert or minimize tax increases and benefit cuts in the years ahead. To receive the funds, minor changes would need to be made to the current unemployment insurance system that will allow the program to better serve certain categories of laid-off workers who are currently ineligible for benefits.
OK Policy’s brief shows that since these provisions are mostly in effect already in Oklahoma, the state is required to make only modest and inexpensive adjustments to its UI program in order to be eligible for the full amount of additional federal funding.
“These federal funds will provide tangible benefits to Oklahoma workers and businesses, who may otherwise be facing losses in benefits and tax hikes at precisely the wrong time,” said David Blatt, OK Policy’s Director of Policy. “To refuse to implement the changes needed to become eligible for these funds would certainly not serve the state’s interest.”
Officials from the Oklahoma Employment Security Commission are working with the Governor and legislative leaders to reach an agreement this legislative session that would allow for Oklahoma to implement the necessary amendments to state law to receive the federal money.
For more information, and to read the full brief, click here.