King opposes extension of unemployment benefits

AUGUSTA – For the thousands of Mainers who have exhausted their regular 26 weeks of state unemployment benefits, prospects for additional help are growing dim.

Congress is deadlocked, with House leadership refusing to even allow consideration of a Senate-passed extension. And Tuesday, Gov. Angus King said he would oppose any extension of state-funded benefits because such an extension would increase employer taxes.

“The system is not designed to be a permanent safety net, but a temporary one,” King said. “If we are indeed in a rebound, then a lot of those people will be finding jobs over the next several months.”

King said there always are people exhausting their benefits, even in good times. He said with relatively low unemployment rates in the state, he couldn’t support raising the tax on employers that funds the unemployment program.

“We want employers hiring people, not having to pay higher taxes,” King said.

A Department of Labor study estimates it would cost more than $32 million to provide an additional 13 weeks of benefits. Though there was $400 million in the Unemployment Trust Fund at the beginning of the month, the study projects that those additional payments would bring the trust fund below the 18-month reserve required by state law. To replenish the fund, the unemployment tax would have to be increased.

“I just don’t think that is warranted right now,” King said. “If things get worse, and unemployment goes up, I will have to think about it again.”

Maine AFL-CIO President Ed Gorham is angry with King. He said the tax rates for employers have been going down for several years, and the fund is in the best shape it has been in for decades.

“We should consider slowing down the rate of [tax] decrease the businesses have been receiving to help these workers who have lost their jobs,” he said. “This is not a tax increase and the governor should be concerned for these thousands of workers that need help.”

Gorham said the unemployment system is supposed to be a safety net for workers who have lost their jobs through no reason of their own, and for many Mainers the net is full of holes.

“Congress has dropped the ball on this. I hope the Maine Legislature won’t,” he said.

Peter Gore of the Maine State Chamber of Commerce agreed Congress has dropped the ball and should provide federally funded benefits. But he warned that a state-funded extension would hurt the slowly recovering Maine economy.

“The way to do this is at the federal level, and not by enacting legislation that would significantly raise the taxes that Maine employers pay above what businesses pay in other parts of the country,” he said.

Last month, legislative leaders approved consideration of a bill sponsored by Rep. George Bunker, D-Kossuth Township, co-chairman of the Labor Committee, that would provide for 13 weeks of additional state-funded benefits.

“I think we have to look at it, given that Congress has not provided for an extension of benefits,” said Sen. Tom Sawyer, R-Bangor.

But Sawyer said he also is very concerned about businesses having to pay higher taxes to pay for the benefits.

“Just look at what small businesses have been hit with – higher health insurance costs and workers’ comp costs,” he said. “I don’t think they can take much more.”

But Rep. Zach Matthews, D-Winslow, said those Mainers who have lost their jobs need help now, and if Congress does not act, the Maine Legislature should.

“We need to pass this, ” he said. “I hope Congress extends benefits, but if they don’t, we need to do this. There are people hurting and we need to help them.”

King plans to urge Congress to extend benefits while at the winter meeting of the National Governors’ Association in Washington next week. He praised Maine’s congressional delegation for supporting a federal extension.

“But we are not in the leadership in the House,” said U.S. Rep. John Baldacci, D-Maine, “and we have to convince them to allow a vote on the bipartisan bill the Senate passed. If they allow a vote, I think there are enough votes to pass it.”

Baldacci said if House leadership does continue to block a vote when Congress returns to session next week, he expects there will be an effort to force a floor vote, similar to the successful effort on campaign finance reform.

Just how many Mainers are continuing to exhaust their benefits is uncertain. In 2001, revised Department of Labor figures indicate 8,747 Mainers used up all 26 weeks of their unemployment insurance benefits, a 13.7 percent increase from 2000. The figures for January 2002 are not yet compiled.

“I don’t think we have a clear picture yet of what is happening,” said Laura Boyett, division director of the Maine Bureau of Unemployment Compensation. “There were some mistakes in the way people were counted, but we still had a major increase in December.”

Boyett said this recession has resulted in far fewer Mainers on employment than a decade ago. In 1991, nearly 50,000 Mainers were getting benefits where last month in any particular week only about 16,000 Mainers were receiving some level of payments.