$50 Million Unemployment Fund Raid Gets Derailed

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By J.L. Wilson – 6/26/09
Associated Oregon Industries
Oregon’s largest business lobby

The legislature earlier this week abandoned Governor Ted Kulongoski’s proposal to siphon $50 million from the state’s Unemployment Trust Fund to fund a temporary summer jobs program. As late as last week, it appeared that AOI was facing long odds in defeating the proposal, which was embedded in House Bill 3500. AOI was told last week that a deal had been struck that paved the way for the legislature to pass HB 3500, which included both a $30 million emergency unemployment benefits extension as well as the $50 million raid on the state’s Unemployment fund.

As AOI continued to lobby against the measure (you can read AOI’s arguments here), a very curious development took place. Legislators, particularly in the Senate, began to question the wisdom of taking these employer-paid funds and using them for a purpose that employers do not support. Along the way, AOI received support from the Employment Department’s own Advisory Council (read their comments here). But the final straw came when the Governor vetoed the legislature’s schools budget. At that point, frustrated legislators became unwilling to help the Governor pass his key priority. In the span of one week, the passage of the $50 million Unemployment Fund raid went from a near certainty to being completely derailed.

The issue culminated this week in the passage of a new bill – House Bill 3483 – which included the emergency benefits extension, but did not include the Governor’s $50 million temporary summer jobs program. As the session comes to a close, AOI will continue to remain vigilant on this issue. AOI remains opposed to precedent-setting diversions from the state’s Unemployment Trust Fund.

By J.L. Wilson – 6/26/09
Associated Oregon Industries
Oregon’s largest business lobby