During the 2015 legislative session the Missouri General Assembly approved HB 150, a bill crafted with hopes of reforming our state’s system of dealing with unemployment insurance. The intention of the bill was to strike a balance to ensure Missourians would have access to unemployment benefits, but at the same time protect our state’s job-creators from excessive taxes and fees. It was needed to help bring financial stability to a system that had gone insolvent after the 2008 economic downturn.
The insolvent system resulted in Missouri having to borrow money from the federal government to cover unemployment benefit claims, and employers were required to pay millions in interest alone on the borrowed funds. Though several other states were faced with this same problem, Missouri’s unemployment fund was especially unstable. In fact, we are the only state who had to borrow funds from the federal government to provide benefits to unemployed workers during the last five economic downturns.
Consequently, the legislature felt it was time to seriously address this problem, and they did so by passing HB 150. The provisions of the bill would link benefits to the rate of unemployment and would ensure that Missouri keeps more money in the unemployment insurance trust fund. By tying the benefits to the average unemployment rate, more benefits will be available when unemployment is higher. For example, if the state were in a position of high unemployment (9% or higher), benefits would be available for up to 20 weeks. If unemployment rates are lower (less than 6%), the benefits would only be for 13 weeks. A majority of members of the General Assembly—both the House and Senate-- supported these changes in order to end our state’s trend of borrowing money from the federal government to pay for unemployment benefits. Furthermore, the legislation was designed to make sure the state has enough money in the unemployment insurance trust fund.
After the legislature passed HB 150 toward the end of the 2015 session, it was sent on to the Governor. On May 5, he vetoed it and the bill was then returned to the legislature. House members quickly responded by overriding the Governor’s veto and sending it over to the Senate in order to complete the override. The Senate did not act on the override before the regular session ended, but instead completed the override motion during the 2015 Veto Session.
After the September Veto Session of 2015, HB 150 went into effect as law. Missouri had begun the process of reforming its system of unemployment as was intended by the General Assembly. HB 150 remained in effect until it was recently struck down by the state Supreme Court.
The high court decided that the Senate violated the constitution by overriding the veto during its annual veto session, which the court said is reserved for only those bills vetoed during the last five days of the regular session. It was the court’s opinion that because the bill was vetoed by the Governor more than a week before session’s end, the Senate had to act on the override motion during the regular session and not during Veto Session.
Both Senate and House members have pledged to revisit this issue when the legislature convenes for the 2017 session in January. All are in agreement that the state’s system of unemployment insurance needs to be fixed, so that it can remain solvent. This will be a priority for the legislature and Missouri’s new governor.