The Missouri Department of Labor this month announced a waiver process for those Missourians who received federal unemployment assistance and were then told they had not been eligible for it. Over the past few days it sent notices to Missourians who may be eligible for such a waiver.
House lawmakers in both parties pushed to have the state refuse to seek repayment of federal unemployment benefits. Many had heard from constituents that the Department was demanding back money Missourians received while struggling in the midst of the COVID crisis, and typically months after it was already spent.
HB 1083 passed out of the House 157-3 in early March but did not reach the Governor’s desk.
Lawmakers heard that some Missourians were being told the pay back in excess of $10,000 in federal and state unemployment overpayments. The Department’s action would relieve the federal overpayment liability, which makes up the vast majority of that.
The Missouri House has voted to waive the biggest portion of unemployment overpayments that some 46,000 Missourians were being told to repay. House members also heard that Governor Mike Parson (R) now supports the effort, and his Department of Labor will “pause” efforts to collect the federal portion of those overpayments while the legislation is moving.
Legislators learned that many of the Missourians who applied for and received unemployment assistance last year were then told that the state erred in finding them eligible. They were told they had to pay back the money, often months after it had already been spent on necessities. Some Missourians owed more than $20,000.
The bill that was passed on Thursday would waive the federal portion of those repayments, which amounts to roughly three quarters or more of what most owed. The legislation was the product of a broad, bipartisan effort.
Republic representative Jered Taylor (R) chaired the committee that held hearings with the Department of Labor about this issue. He said waiving this portion is the right thing to do for Missourians who were and are struggling, and were encouraged to apply by the state and federal governments.
Democrats supported the bill, though some say Missouri should also waive repayment of state unemployment overpayments. Republicans say to do that would jeopardize the integrity of the state’s unemployment trust, and lead to higher payments for the small businesses that pay into it – business which are also struggling due to the COVID crisis.
He and other Democrats say the state could use CARES Act money to waive the state’s share of these overpayments and keep small businesses from being impacted. Shell Knob Republican Scott Cupps said he’d be good with that.
The House rejected an emergency clause – language that would make the bill effective immediately upon being signed by the governor. Instead it would take effect August 28. Eggleston said this was part of an effort that’s developed in the last few days to ensure the governor’s support. He said the Department wants time for training and the creation of paperwork that would go into issuing up to 46,000 waivers.
The Special Committee on Government Oversight has heard that of roughly $150-million in overpayments, only a small portion – roughly a quarter or less – came from the state’s unemployment trust. State statute requires the Department to get that paid back.
The larger portion comes from federal covid relief, the repayment of which the federal government has said states can choose to waive. Missouri Governor Mike Parson (R) has told his Department he wants it to be paid back.
The committee held a hearing on six bills – three filed by Republicans and three by Democrats – and a resolution filed by a Democrat, to deal with the issue.
The big question before lawmakers is whether to require that Missourians pay back overpayments out of the state fund. Committee members from both parties say they would like to waive all repayment, but some are questioning whether that can be done. They are unanimous about finding a way to waive the federal repayments, but some think the state portion might have to be recouped.
Shell Knob Republican Scott Cupps said a priority for the Department is to maintain the integrity of the state’s unemployment trust. His bill is one of those that would waive repayment of federal funds, but require Missourians to pay back state overpayments.
Cupps, who sits on the House Budget Committee, is one of those concerned that to waive the repayment of state benefits, the state would have to replenish the fund. This could come from other core budget functions, such as schools or transportation.
St. Louis Democrat Peter Merideth, also a Budget Committee member and sponsor of the resolution, noted that Governor Parson has proposed putting $500-million in federal CARES Act relief funds into the state’s unemployment trust. He suggests that would be a way to waive repayment of state overpayments while maintaining the fund.