Louisiana lawmakers approved several bills Monday that would provide relief to businesses in light of the state’s unprecedented, pandemic-related unemployment rate, but mostly left behind proposals that would benefit unemployed workers.
The House Labor and Industrial Relations Committee rejected a bill that would have boosted the state’s unemployment benefits from a maximum of $247 to $347 per week. The Louisiana Association of Business and Industry—the state’s most influential business group—opposed the legislation.
Rep. Larry Frieman, who voted against the bill, says he was concerned the increase would accelerate the “burn rate” of the state’s unemployment insurance trust fund, which pays for unemployment benefits.
That trust fund has already run dry. Louisiana is borrowing money from the federal government in order to continue giving out the benefits.
However, lawmakers in both parties were willing to vote for multiple pieces of legislation that reduced the funding in the unemployment trust fund in other ways—ways that directly benefit employers. The LABI had pushed those measures.
House and Senate committees separately voted Monday for proposals to temporarily prevent businesses from having to pay higher taxes in order to replenish the depleted unemployment insurance trust fund. Their approval came on the heels of Gov. John Bel Edwards altering his COVID-19 executive order last month to do away with the same tax temporarily.
Louisiana hit the point where the “solvency tax” on businesses should have gone up automatically weeks ago. It’s triggered when the state unemployment trust fund dips below $100 million. In its current state, the trust fund is either very close to—or has actually run out of—all money.
Senate President Page Cortez, R-Lafayette, and House Speaker Clay Schexnayder, R-Gonzales, sponsored the two pieces of legislation that would lift the solvency tax until August. The measures—and presumably the governor’s executive order—could cost the trust fund about $60 million in 2021, according to a fiscal analysis.
Cortez’s proposal is part of a larger legislative package in the Senate that would suspend some other financial assessments on employers and keep unemployed worker benefits from dropping.
In addition to higher business taxes, Louisiana is supposed to cut unemployment benefits—from a maximum of $247 per week to $221 per week—once the trust fund becomes depleted. That decrease is currently scheduled to take place in January, but Cortez’s package of bills would prevent a reduction in benefits until August.
Edwards and several lawmakers have also expressed an interest in seeking federal funding to backfill the trust fund. Louisiana is hardly the only state that’s run out of money to pay out unemployment benefits. The Associated Press reports that half of the states are experiencing the same problem. So getting support from Congress isn’t out of the question.