Michigan Democrats wanted to continue offering 26 weeks of state unemployment instead of 20.
Republicans did not want companies to cover costs.
Thus, the Michigan Legislature has pledged itself, promising to put $ 220 million in taxpayer dollars into the employer-financed unemployment trust fund to pay for it.
Governor Gretchen Whitmer vetoed the $ 220 million, saying it was needed elsewhere, but that also meant cutting the extra six weeks of benefits.
“This is the real irony, the people who are injured immediately are unemployed workers that the governor says she cares about,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce.
The change does not affect those who are currently unemployed. Anyone who started receiving unemployment before 2021 is bound to get 26 weeks of state benefits, said an unemployment insurance agency spokesman.
But for those starting with unemployment in 2021, they will be limited to 20 weeks of state unemployment. Thanks to the $ 908 billion COVID-19 federal aid package, many people will be entitled to another 24 weeks of federal unemployment. Some are also eligible for an extra 20 weeks of extended benefits.
The only reason many are unemployed is because Whitmer took his jobs with his closing orders, said Gideon D’Assandro, spokesman for Mayor Jason Wentworth, R-Clare.
“People counted on these benefits and the Legislature delivered them,” said D’Assandro. “But because of the veto, they are now at risk and people trying to plan for the new year are confused and concerned about what the future holds.”
Democrats say there is still time to pass legislation to have 26 weeks of state unemployment benefits instead of 20 – as those affected by this new change will not lose benefits until the full 21st week of 2021, which is at the end of May.
Ideally, Democrats want the 26 weeks of unemployment to become permanent in Michigan, said Sen. Curtis Hertel, D-East Lansing, who sponsored the unemployment extension project. Michigan is one of the few states that offers less than 26 weeks of unemployment – a change made during the administration of former Governor Rick Snyder to save companies money.
“If what Republicans are saying is that they will not support 26 weeks of unemployment unless they get a corporate tax cut, then that can be a difficult pill to swallow,” said Hertel.
Hertel also said there was still time to spend another $ 220 million-like endowment for the trust fund, which by statue would activate the 26-week extension.
“In the statute now, it says 26 weeks, but there are requirements to get there and the legislature can choose to take those actions,” he said. “It could be $ 220 million or something. The legislature has many options for things to approve ”.
Senator Jim Stamas, R-Midland, who drafted the COVID-19 relief plan, said none of Hertel’s options are necessarily attractive.
“With the governor vetoing the money that would go to the trust fund, this leaves a very challenging path for any kind of future negotiations with the governor at this time,” he said. “You never say never, but I don’t know which way it is at the moment, and I personally would object to a permanent extension for 26 weeks.”
Whitmer criticized the attempt to spend $ 220 million in general fund money to support the trust fund, she said at a news conference on Tuesday.
“General fund dollars should be used to finance essential services like vaccines and PPE, not to give tax incentives to large companies,” said Whitmer in a press release.
As of Monday, the Michigan Unemployment Trust Fund had $ 732 million – well below the fund’s $ 4.6 billion at the start of the pandemic. When the fund drops below $ 2.5 billion, entrepreneurs need to pay more for it.
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