Gov. Harry Hughes, reacting to what an aide called the "social and psychological impacts of unemployment," is considering pushing for an increase in the weekly benefit paid by the state to out-of-work Marylanders.
Hughes legislative aide Ben Bialek told a House committee today that the increase would be possible only if an acceptable method can be worked out to replenish the state's Unemployment Insurance Trust Fund, which is close to bankruptcy.
The current maximum weekly unemployment benefit is $153. Bialek said the increase under discussion will amount to $10 to $15 a week.
Bialek also told the House Economic Matters Committee, which is considering a dozen unemployment bills, that the governor also wants to extend the state program that gives 13 extra weeks of unemployment pay to those who have exhausted 26 weeks of federal benefits.
The additional benefits program was adopted as a one-year measure during a special session of the legislature that Hughes called last summer after changes in federal law produced a drop in federal extended unemployment benefits paid to Marylanders. Bialek said Hughes would like the program, which covers some 800 new people each week, to be made permanent by the legislature.
Maryland's $153 maximum payment is lower than what most area jurisdictions pay. The District of Columbia pays a maximum of $206 a week; Pennsylvania pays $198; West Virginia pays $211. Virginia's maximum is $138. Pennsylvania, West Virginia and the District already have borrowed money from the federal government to keep their trust funds in the black, Bialek said.
Bills have been introduced in both the House and the Senate that would increase the Maryland maximum to nearly two-thirds of the laid-off worker's last wage, which by some estimates would be about $195.
Increasing unemployment benefits would further press the state's unemployment trust fund, which is supported by taxes on businesses. It is already facing possibly bankruptcy by the end of the year because of the large and long-term drain caused by continued high unemployment.
Under current law, when the fund gets too low, a surcharge is imposed on businesses. That surcharge is scheduled to take effect this spring.
According to Bialek, even with the surcharge, Maryland will likely have to borrow money from the federal government for a few months late this year or early next year to continue sending out unemployment checks.
The precarious fiscal health of the fund has been the source of an intense debate--heard again today during the committee hearing--between labor and industry.
Labor's supporters have proposed increasing the size of the fund by taxing business at a higher level and using a higher "wage base" for calculating the tax. Businesses now pay .1 percent and 5 percent annually on the first $7,000 of wages earned by every employe. The surcharge could add another 2.7 percent, up to a maximum of 6 percent.
In opposing labor's suggestions, businesses say that like workers, they are hard pressed by the national recession. Business is also trying to get the surcharge phased in over three years.
According to Bialek, in considering increasing unemployment benefits Hughes is looking at the possibility of increases in the minimum taxes levied against larger businesses and in the taxable wage base used to determine an employer's payment into the unemployment trust fund.