Policymakers have seemed to suggest that they had no choice but to overhaul the state unemployment insurance system in the way that they have proposed. It is a bitter poison that we all must drink to get the economy going again is their claim. This is simply not the case.
There was nothing inevitable about the choices that were made in this bill.
In fact, a tomb of options was laid out last Spring by the Upjohn Institute that would address the debt in the same timeframe and prevent the FUTA credit reduction to reaching what proponents of House Bill 4 assure us are unsafe levels.
At the Budget & Tax Center, we have long called on policymakers to reform our state’s unemployment insurance system and establish forward financing. Our proposal, if implemented, would achieve solvency in roughly the same timeframe as this bill. The catch, of course, is that it would do so by balancing the contributions by employers and putting in place a financing mechanism not sustained through severe benefit cuts.
House Bill 4 is not the only option. There are many available to policymakers. And there is time to consider them and come up with a better fix to the system this session.