Governor Lee Signs Off On Unemployment, Certificate-Of-Need Reform

Photo: Tennessee Governor Bill Lee

Photo Credit: Gov. Bill Lee / Instagram

Published May 28, 2021

By Jon Styf [The Center Square contributor] –

Tennessee Gov. Bill Lee has signed bills to lower the number of weeks residents can accept unemployment benefits and to reform hospital certificates of need.

The base number of weeks Tennessee residents are eligible for unemployment will be reduced from 26 weeks to 12 weeks, starting on Dec. 1, 2023, but the weekly base pay will rise either $50 or $25 per week. The $50 increase is for those who made $26,000 or more annually before unemployment. The current maximum weekly benefit is $275.

The bill stipulates if the state’s unemployment rate rises above 5.5%, the number of weeks an unemployed resident would get benefits increases one week for every 0.5% the unemployment rate is above 5.5%. Unemployment benefits will be capped at 20 weeks.

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Debate on the bill centered on the timing and impact of these decisions, with lawmakers such as Sen. Jeff Yarbro, D-Nashville, saying the optics were poor.

“This is a bad idea,” Yarbro said. “This is some real Ebenezer Scrooge stuff. We are cutting unemployment in half after 1 million people in this state have used this. That’s not people who are lazy. That’s 1 out of every 3 workers.”

The fiscal report on the bill estimated it will save the state $33.5 million annually because of the reduction of benefit weeks.

Senate Finance, Ways and Means Committee Chair Bo Watson, R-Hixson, said the bill was about the long-term stability of the state’s unemployment trust fund and assuring the state won’t have to raise rates on businesses.

Watson said if the fund drops below $1 billion, it triggers a rate increase for employers. That would have happened this year if federal pandemic relief funds had not arrived.

Tennessee had more than 6,000 new unemployment claims last week, along with the 50,000 continuing claims across the state. That’s down from the recent high of more than 13,000 new claims for the week of April 17.

The certificate-of-need reform will reduce the requirements, timeline and costs for the opening, reopening or expanding hospitals.

CON laws require providers to prove an area has a need before they can provide health care services. The idea behind CON regulations was that the state would limit the number of hospital beds available because empty beds, in theory, amounted to higher costs for those who used the hospital.

The bill reduces the number of days applications will take to process from 135 days to 60 days, and it will exempt services, such as nonpediatric MRI equipment in counties with populations higher than 175,000 people and mental health services, and will allow hospitals to move small distances or rural hospitals to reopen without restarting the CON process.

Sen. Page Walley R-Bolivar, said that the temporary halt to many CON restrictions during the COVID-19 pandemic has helped multiple formerly closed rural hospitals in his district to begin the process of reopening after sale.

The Beacon Center of Tennessee said the state has rejected 10.4% of certificate-of-need applications it has received over the past three years.