Saying Tennesseans need to get off the public dole and back to work, House Republican leaders are supporting legislation to cut the time frame for the state’s unemployment benefits in more than half.
House Speaker Cameron Sexton endorsed a bill Thursday that would reduce unemployment payments to 12 weeks from 26 weeks when the jobless rate is at 5.5% or less. The measure, sponsored by Rep. Kevin Vaughan, R-Collierville, would increase payments $5 to a maximum of $280 per week and add a week of eligibility for each half percent the unemployment rate rises to a maximum of 20 weeks.
Sexton, a Crossville Republican, said the measure mirrors legislation other states are passing and is designed to base the time frame on the unemployment rate.
Asked about the small payment increase, Sexton said the maximum payment could go up as the legislation makes its way through the House committee system. Tennessee has one of the lowest maximum payouts in the nation, with only three states paying less.
Unemployment is supposed to be set up “to help people get back on their feet until they get a job,” Sexton said. “So the current decision is: Is it designed that way right now? Or we can design it to get more solvency and get people back to work a little quicker based on the unemployment rate, which is totally fair.”
Tennessee has “plenty of jobs” paying $15 to $18 an hour, Sexton said, but the federal government caused a “secondary problem” by making unemployment payments of $300 a week, creating a situation in which some people are making more money on unemployment than when they were working.
The federal government, under President Donald Trump, initiated those extra unemployment payments in the height of the COVID-19 pandemic in 2020 when many businesses were ordered to be closed. Non-essential businesses such as restaurants, bars, retail stores and hotels were among those hardest hit.
You've gotta wonder why someone would go to all the trouble to obtain power to use it for such trivial and mean-spirited ends and spend so little time trying to solve an actual damn problem. – Sen. Jeff Yarbro, D-Nashville, responding to Republican legislators.
Tennessee’s unemployment rate reached 15.5% amid the shutdown when more than 355,000 filed claims. The state’s jobless rate is at 4.9%, according to this week’s Department of Labor report, with Tennessee paying 116,751 people more than $7.9 million and the federal government more than $63.1 million.
House Republican Caucus Chairman Jeremy Faison, said businesses across Tennessee, including his pest control company, are struggling to find people to work.
“There’s all types of factories in East Tennessee that start out at $15 bucks an hour,” said Faison, a Cosby Republican.
He mentioned a Burger King in the Sparta area that had to close because it couldn’t find enough workers.
“So the notion of us just continuing week in and week out paying unemployment when there are jobs readily available from one end of this state to the other is really bad government. And we’re encouraging people to just sit still instead of being productive,” Cosby said.
East Nashville resident Richie Townsend, who lost his bartending job two times amid the pandemic, told Tennessee Lookout this week how frustrated he’s been trying to navigate the system. He received his initial unemployment funds but is still awaiting payments from a claim last fall.
“I find it absolutely absurd that Tennessee, which already has one of the lowest unemployment payouts in the country, would attempt to remove 14 weeks of unemployment from those that need assistance,” Townsend said in an email.
Legislative Democrats said Thursday other states are trying to repair their unemployment systems while Tennessee is “going backwards.”
Sen. Jeff Yarbro, leader of the Senate Democratic Caucus, accused Republicans of distracting people with “culture wars” such as legislation affecting transgender youth while pushing the bill to “make Tennessee’s unemployment the least generous in the entire country in the wake of a pandemic where hundreds of thousands of people suffered with unemployment.”
“You’ve gotta wonder why someone would go to all the trouble to obtain power to use it for such trivial and mean-spirited ends and spend so little time trying to solve an actual damn problem,” Yarbro said.
Vaughan told the Tennessee Lookout this week the legislation is designed to create an equation that keeps Tennessee’s Unemployment Trust Fund solvent by tying the length of time people can receive benefits to the unemployment rate. He noted when the rate falls to 5.5% or less, people should have an easier time finding employment.
The legislation could reduce benefits between $31 million to $36 million a year, according to a state estimate, potentially affecting about 65,000 people.
When Tennessee’s unemployment skyrocketed last March and April, Gov. Bill Lee’s Administration used nearly $1 billion from the federal CARES Act to rebuild the state’s Unemployment Trust Fund. Otherwise, businesses would have had to pay high taxes to push it back up above the billion-dollar mark, the governor said.
If the Legislature passes the bill and Lee signs it, the measure would take effect July 1, 2023.