Gov. Rick Snyder signed legislation Monday, Dec. 19, to restore the long-term solvency of the state’s unemployment trust fund, reduce fraud and prevent punitive federal fees and interest from being imposed on Michigan employers, said key sponsor Sen. Mark C. Jansen.
“Ten years of recession exhausted Michigan’s unemployment fund and forced the state to borrow from the federal government to pay more than $3 billion in jobless benefits,” said Jansen, R-Gaines Township. “Michigan job providers were facing a 50 percent federal unemployment tax increase to recover that debt. The pro-jobs reforms signed today by the governor will repay the trust fund’s debt and stop that devastating federal tax hike on Michigan employers.”
Public Acts 267 and 268 will pay back the $3.2 billion that Michigan’s unemployment fund owes the Federal Unemployment Insurance system through a 10-year, tax-exempt bond.
“I sponsored these reforms because allowing a tax increase on employers in our state just as our economy is rebounding would have been disastrous,” Jansen said. “I also ensured the bills were part of a package to stop fraud, waste and abuse in the unemployment system. These new laws create a more efficient system, free of debt. This encourages job growth and investment because it lifts burdens off of job creators.”
Public Act 269 includes reforms that will deter fraud, prevent overpayments and encourage workers to seek employment before exhausting benefits.
“It’s important to point out that restoring the state’s unemployment insurance system, which is entirely funded by employers, will also ensure honest workers who lose their jobs will still receive the same amount of benefits,” said Jansen.