Legislation would cut time frame for state unemployment

By: - April 8, 2021 4:03 am
(Photo: Getty Images)

(Photo: Getty Images)

East Nashville resident Richie Townsend struggled to find work after losing his restaurant job when the COVID-19 pandemic struck in March 2020. 

Townsend, 39, a former bartender at Rolf and Daughters in Germantown, has been on and off state and federal unemployment programs for a year but still has more benefits pending after being laid off a third time.

As he starts a new job in Franklin, the state tells him it is expediting his request, and he’s reached out to his state House member but hasn’t gotten any payments on this latest extension. 

Life could get even tougher for Tennesseans seeking unemployment under legislation being considered in the General Assembly. Some 65,000 people annually could be affected if the time frame for collecting unemployment benefits is cut by more than half.

“It sounds like an over-exaggeration by our local government to try to react to the fact that unemployment was extended for a year and a half in total,” Townsend says.

Sen. Art Swann, R-Alcoa (Photo: Tennessee General Assembly)
Sen. Art Swann, R-Alcoa (Photo: Tennessee General Assembly)

Senate Bill 1402 sponsored by Sen. Art Swann, R-Alcoa, and House Bill 1039 sponsored by Rep. Kevin Vaughan, R-Collierville,  would cut unemployment from 26 to 12 weeks while giving a modest increase in the benefit of about $20 a month. It would take effect July 1, 2023, if it passes. Neither bill has been introduced in committees.

Under their legislation, the 12-week time frame would kick in when the state’s unemployment rate dips below 5.5%. An additional week would be added for each half-percent increase in the unemployment rate up to a maximum of 20 weeks if the jobless rate hits 9%.

Swann, a Maryville Republican, said Wednesday he is planning to amend the bill because he doesn’t think 12 weeks is enough time for a person to find gainful employment. He was uncertain, though, how much time the amendment would provide.

As the bill is written, such a move could save the state’s unemployment trust fund about $31 million to $35 million, according to the legislation’s estimated fiscal impact. Tennessee’s fund took a big lick in 2020 when the unemployment rate skyrocketed to more than 15% during the height of the COVID-19 pandemic as non-essential businesses were required to shut down.

“The Unemployment Trust Fund is called a trust fund because people trust it’ll be there when they need it. But in order for it to be there when they need it, we’ve got to have it sustainable,” Vaughan said. “And had we not had the federal CARES Act money to float us during the pandemic, we would have seen how vulnerable we really are. This is just a math equation that stabilizes and makes the system more sustainable.”

Tennessee’s maximum weekly benefit is $275, ranking it fifth lowest in the nation.  States that have lower time periods for which workers can claim unemployment benefits all have higher rates compensation than Tennessee does.

A Department of Labor study found Tennessee’s Unemployment Trust Fund ranked 31st nationally for sustainability, before the pandemic struck, according to Vaughan, a Collierville Republican.

Gov. Bill Lee’s Administration poured nearly $1 billion from the CARES Act funding into the trust fund to keep it well above the $1 billion mark. Otherwise, the governor has said, businesses would have had to pay higher rates into the trust fund, equating to a business tax increase.

People such as Townsend working in the restaurant, hotel services and entertainment sectors felt the brunt of the pain.

Nearly 111,200 people received unemployment benefits in Tennessee for the week ending March 27, and 69,000 claims are pending a determination for eligibility. 

Tennessee’s maximum weekly benefit is $275, ranking it fifth lowest in the nation. Adding $5 a week wouldn’t push its standing up much compared to other states.

Most states allow 26 weeks for unemployment benefits. In contrast, Georgia, Nevada, Missouri, Hawaii and Kentucky all allow 16 or less, but their maximum weekly benefits are much higher than Tennessee’s. Georgia’s is $365, Nevada’s is $450, Missouri’s is $320, Hawaii’s is $648 and Kentucky’s is $552.

Townsend hates to say he’s become “jaded” by the unemployment system but notes he has definitely educated himself by doing research.

“It made me want to reach out to local legislators … because I feel like people need to know what’s going on,” Townsend said. “I feel like there’s a lot of information out there the general public isn’t aware of, how help is being offered as a mask, but how when you get down to the nitty-gritty it’s really not that great.”

State Sen. Jeff Yarbro, a Nashville Democrat, contends reducing benefits after one of the worst economic years in state history makes no sense.

“We’ve seen hundreds of thousands of Tennesseans be pushed out of work through no fault of their own, sometimes for a really extended time period. Making Tennesseans’ unemployment relief even less generous is a step in the wrong direction,” he said.

Yarbro agrees with increasing unemployment payments because the state has one of the “stingiest” programs in the nation, well below surrounding states such as Kentucky, Georgia and Missouri. Most people receive less than the maximum payment of $275 a week, he said.


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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.