Florida Legislators Slash Unemployment Insurance to Reduce Business Taxes

Several states have seen lawmakers take a cynical and economically-damaging approach to revenue shortfalls by slashing unemployment insurance (UI) for those hit hardest by the downturn. Driven by flawed right-wing ideology, Florida legislators recently approved an extreme measure that not only undermines the economic security of Floridians, but also threatens recovery in a state that is already deeply affected by the lasting impacts of the recession and currently has an unemployment rate that is hovering around 11 percent, the third highest in the nation.

In the past few days, state lawmakers approved legislation that would make Florida the only state in the country that ties UI to the state's unemployment rate. As the National Employment Law Project (NELP) describes, "under the House version, the national standard of 26 weeks of benefits would no longer be available to unemployed Florida workers. Instead, the maximum number of weeks would vary from 23 weeks when the state’s unemployment rate is as high as 10.5 percent to as low as 12 weeks when the rate drops to 5 percent." On average, Florida provides an average weekly benefit of approximately $228 to jobless workers who qualify for unemployment benefits. NELP has ranked the state 46th nationwide in benefits provided to jobless workers.

The bill would also make the process for qualifying for UI even more stringent and reduce by 10 percent the tax rate that companies pay to cover the benefits. While undermining jobless workers and families, the bill would cut business taxes in a state that already inefficiently directs hundreds of millions in taxpayer dollars to corporate tax breaks and subsidies. The state currently has the second most regressive tax structure in the country and this initiative would only exacerbate the burden placed on vulnerable populations and the middle class.

Research indicates the positive economic and fiscal impact of supporting jobless workers. Moody’s Analytics reports that $1 spent at the federal level on extending unemployment insurance results in $1.61 of economic activity. A recent analysis from the Center for Labor Research and Education at UCLA explains that the "UI program represents one of the most consequential policy responses to the hardships imposed on workers and communities by high rates and long spells of unemployment...In California, UI benefits and extensions helped approximately 1.5 million workers and their families afford basic necessities in 2009, kept nearly 500,000 Californians out of poverty, and resulted in spending that supported 161,000 jobs in the state." On the other hand, studies consistently demonstrate the detriment of pursuing massive corporate tax cuts.

This legislation, combined with other deleterious measures spearheaded by the right-wing, does nothing to address fiscal or economic pressures. State Sen. Dennis Jones, a Florida Republican, confirmed as much when reflecting on the 2011 session, "this is certainly not the 'jobs, jobs, jobs' that the public expected. If we added everything up, we're probably in the negative this session for jobs, not the positive."