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Senate reopens unemployment benefits debate with bill to access stimulus dollars

Rosalind Helderman

It was one of the hottest political topics in Virginia last spring -- and now it's back.

The Virginia Senate today approved a bill that make changes to the commonwealth's unemployment insurance program which would allow the state to access $125 million in federal stimulus money for unemployment benefits.

Last year, the House of Delegates chose to reject the dollars because they did not want to accept the strings attached -- adjusting the program to offer unemployment benefits to people enrolled in training programs or who had held part-time jobs. They argued that employers would be left with the costs of the expanded program once stimulus dollars ran out.

Gov. Tim Kaine was livid at their rejection. The Democratic Governors Assocation funded a massive ad campaign during the spring aimed at tarring now-Gov. Bob McDonnell with rejecting desperately needed unemployment dollars.

The House might kill the bill out of hand. But the bill passed by the Senate on Monday was a little different than what was rejected by the House last year. And it is sponsored by a Republican, Sen. John C. Watkins (R-Chesterfield), who happens to chair the committee that oversees the unemployment insurance trust fund.

This year's bill would extend benefits to unemployed workers enrolled in training programs but not, this time, to part-time employees. Instead, it would offer benefits to workers who have compelling family reasons for being unemployed -- like illness in the family or domestic abuse. (Accessing the federal funds required extending benefits to two of four particular groups.)

Watkins agreed that the changes would indeed result in an increase in unemployment insurance taxes paid by employers, on average by $2.44 per employee each year. But his argument for passage basically boiled down to this: The trust fund is broken.

The fund had $1.3 billion in it just 15 months ago, but as of this spring was paying out about $25 million a week to unemployed Virginians. Now, the fund has been borrowing from the federal government to meet its obligations. He said the federal stimulus dollars are needed to repay Virginia's debt to the feds, or else the state will soon owe interest, about $30 million a year.

The Senate passed the bill 31 to 9. Now, last year's arguments return, and the House will take up the issue in coming weeks.

By Rosalind Helderman  |  February 8, 2010; 2:45 PM ET
Categories:  General Assembly 2010 , House of Delegates , Robert F. McDonnell , Rosalind Helderman , State Senate , Timothy M. Kaine  
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At some point we can't continue to support every unemployed person in the state to the tune of $300 per week. We are sacrificing our fiscal responsibility to appear to be compassionate.

I was unemployed once. I received unemployment benefits. They ran out. I managed. End of story.

Posted by: lottaaction | February 9, 2010 12:03 PM | Report abuse

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