Notes from the Capitol
By Rep. Paul Anderson
Bumping up against a hard deadline of April 30, the Legislature last week passed and the governor signed into law a bill that fully replenishes the Unemployment Insurance Trust Fund. In addition, the Hero Worker Pay Bill was passed at the same time, and it provides $500 million in one-time payments to frontline workers in Minnesota. It was a somewhat rocky road, but compromise and hard work led to the agreement that lowers the unemployment tax rate on all businesses in the state.
Because of all the shutdowns during the pandemic, applications for unemployment benefits increased greatly. The fund that pays those benefits actually went into a deficit situation and had to borrow money from the federal government to stay afloat. The deficit was around $1 billion and the interest payment to the feds was somewhere in the neighborhood of $60,000 per day!
Businesses were facing up to a five-fold increase in the rate they pay into the fund. Now, with the fund replenished, the base rate will revert back to its original amount. The higher rate actually went into effect back in January but the payments were not due until last week. Those who have already paid their first quarter premium at the higher rate will get either a refund or a credit back from the state.
Minnesota has about 130,000 employers, and they will all need to have their first quarter UI tax amount recalculated. Letters will be sent out to businesses once that recalculation has been completed. Refunds are not going to be automatic, and those businesses requesting refunds may not see them for several months, depending on the volume of processing.
Around 667,000 workers have been deemed as ‘frontline” and are eligible for the stipend from the state, which will be around $750 per person. Basically, 15 industries were designated, and workers in those areas are in line for the money. Broadly, those industries include healthcare, grocery stores, food service and those in child care.
Further defining the areas, those in long-term and home care are eligible, as are healthcare and emergency responders. Public health, courts and corrections, along with schools are eligible. Others are those in food service and delivery, retail, building services and public transit. Lastly, those working in ground and air transportation, manufacturing and vocational rehabilitation are also named as frontline workers.
To be eligible, one must have worked in one of these areas for at least three weeks between March of 2020 and June of 2021. Details of the application process are still being worked out. And payments could take the form of either a check, debit card or direct deposit.
Many of the supplemental budget bills were passed off the House floor last week, with only two, health and human services, along with the tax bill, awaiting action this week. Conference committees will then have the task of reconciling differences in the bills. It’s going to be difficult as the spending amounts and policy items in the House and Senate versions are, in some cases vastly different.