Jobless bill’s passage vital for business, leaders say
Although it was hardly noticed during the 2012 legislative session, it is arguably the most important business bill lawmakers approved this year, business leaders say.
In fact, the measure was so not on either parties’ oft-touted jobs, jobs, jobs agendas, it was allowed to die on the House floor when Republican leaders sacrificed several bills in order to kill a measure calling for civil unions for same-sex couples.
That’s why Gov. John Hickenlooper included it in his call for a special session, and signed House Bill 1002 on Friday.
The measure allows the Colorado Division of Unemployment Insurance to issue revenue bonds. Doing so would stabilize unemployment insurance rates paid by employers, potentially saving them, collectively, millions of dollars a year.
The bill, introduced by Rep. Larry Liston, R-Colorado Springs, and Sen. Cheri Jahn, D-Wheat Ridge, also helps keep the state’s unemployment insurance trust fund solvent, an important aspect while the state’s economy continues to remain sluggish.
The trust fund became insolvent in January 2010 because of the high number of out-of-work Coloradans drawing unemployment benefits.
The fund has not yet regained solvency.
“(The bill) ensures the UI trust fund will remain sound and solvent in the most efficient way possible for Colorado’s employers,” said Travis Berry, a lobbyist for the Colorado Competitive Council, a business advocacy group that pushed for the bill.
The two lawmakers estimate that Colorado employers could save up to $120 a year per worker as a direct result of the new law, which goes into effect July 1.
The state’s unemployment program provides temporary and partial wage payments to people who lose their jobs at no fault of their own.
Those payments come from the Unemployment Insurance Trust Fund, which is funded by premiums and surcharges paid by employers on the first $11,000 of each employee’s annual wages.
When the fund drops, those premiums go up. Because of the recent recession, those premiums reached an historic high earlier this year.
Employers who laid off a larger portion of their workers than other businesses paid a price for those layoffs. The more a company lays off workers, the less favorable their unemployment insurance rating. As a result, they pay higher premiums.
“This new bill will keep the Unemployment Insurance Trust Fund solvent and move it from red to black,” Liston said. “We can save our state’s job creators tens of millions of dollars within a couple of years.”