TN General Assembly Cuts Unemployment Eligibility Weeks By Over Half, Bumps Up Benefit Amount

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Published May 7, 2021

By Jon Styf [The Center Square contributor] –

The Tennessee General Assembly on the last day of the legislative session passed a bill that will cut the number of weeks Tennesseans are eligible for unemployment from 26 weeks to 12 weeks.

The measure, House Bill 1039, also increases the weekly benefit amount.

Unemployed Tennesseans who made $26,000 or more before unemployment would see a $50 weekly bump in unemployment pay. Everyone else would receive a $25 boost. The current maximum weekly benefit is $275.

The House initially approved a flat $25 increase to all weekly payments, but the Senate amended the bill Wednesday with the tiered increase before passing the legislation, 26-7. The House concurred with the Senate amendment Wednesday night, 71-19.

The bill now will be sent to Gov. Bill Lee for approval.

“It’s good for Tennessee businesses,” Sen. Jon Lundberg, R-Bristol, said. “It gives them the opportunity to hire people. It is good policy, in my opinion.”

One topic discussed frequently in debating the bill was businesses struggling to fill job openings, especially with the current $300 weekly federal addition to state unemployment benefits. Lundberg said 254,000 jobs are listed open on Jobs4TN.gov.

“They’re all looking for people,” Sen. Mike Bell, R-Riceville, said. “They’re looking for warm bodies. The jobs are out there, and it’s time we stop incentivizing people staying home.”

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

Sen. Jeff Yarbro, D-Nashville, pointed to the bill’s fiscal note, which said the bill would lower the amount of revenue brought in by Tennessee businesses. He also scoffed at the idea that Tennesseans are staying home instead of taking jobs because of the unemployment payments, saying this bill will mean Tennessee has the lowest unemployment benefits in the country.

“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,” Yarbro said.

The bill would amount to an estimated savings of $33.5 million annually because of the reduction of benefit weeks.

Senate Finance, Ways and Means Committee Chair Bo Watson, R-Hixson, said federal COVID-19 relief was used to replenish the state’s unemployment trust fund. Watson said that money prevented the state from having to raise unemployment taxes on businesses by 300%.

Watson said if the fund drops below $1 billion, it triggers an increase in unemployment tax rates.

“We have not borrowed from the federal government,” Watson said. “Several states did that and now have to pay it back with interest.”

Sen. Heidi Campbell, D-Nashville, pointed to approved legislation that increases expense reimbursements to lawmakers.

“I think the optics of doing this at the same time as we are giving ourselves a raise, it’s bad optics,” Campbell said.

“I think it’s morally wrong for us to reduce the benefits,” Sen. Brenda Gilmore, D-Nashville, said. “People draw unemployment for no other reason than they have worked.

“If you’ve not ever been in that situation where you’ve had to draw unemployment to survive, walk in their shoes and then vote your conscience,” Gilmore said.