House Democrats spoke to the media and fielded questions after the close of business on Friday about the Fiscal Year 2023 budget, which was sent today to Governor Mike Parson (R).
One week after hearing from the Department of Labor about the state’s efforts to seek repayment of erroneous unemployment payments from struggling Missourians, a bipartisan slate of House members is debating the best way to provide relief.
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.
“If you’re sitting there staring at a letter that says you owe $4,200 back that’s probably not something you’re going to be able to digest real easy. Where if it says, ‘Hey, you owe $500 back and we’re going to be able to put you on a payment plan where you pay $50 a month for a couple of years, that’s probably something you can digest a heck of a lot easier,” said Cupps.
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.
“I think that we need to not wrap ourselves in circles trying to figure out where this money’s coming from and simply recognize that if we think this is an important form of the relief, well the federal government has given us $2-billion in relief money to use right now. Let’s use that,” said Merideth.
Cupps and other Republicans said they would consider that option.
“The main thing that I talked to the Department about was maintaining the integrity of the trust,” said Cupps. “If it’s already been discussed that we were gonna throw some CARES Act money in there … it is something that could be a tool in the toolbox … it’s something we maybe should look at.”
Five of the six bills filed are largely the same. Committee Chairman Jered Taylor (R-Republic), the sponsor of one of them, said his intention is to pare them down into one bill and to have the committee vote next week on that and the resolution.
The legislation dealing with unemployment overpayments includes: House Bill 1085 (Taylor), House Bill 1083 (J. Eggleston – R, Maysville), House Bill 1050 (Cupps), House Bill 1036 (LaKeySha Bosley – D, St. Louis), House Bill 1035 (Doug Clemens – D, St. Ann), House Bill 873 (Ian Mackey, D-St. Louis), and House Concurrent Resolution 30 (Merideth).
House members from both parties are not happy that Missourians are being asked to pay back unemployment assistance they received in error through no fault of their own.
Department of Labor Director Anna Hui told the Special Committee on Government Oversight overpayments are “kind of built into” the unemployment system. The Department is expected to make an eligibility determination and get a payment out to an applicant within 14 days, generally based solely on information provided by the applicant. As additional information comes in, often from the applicant’s current or past employers, it could prove he or she was not eligible.
She said for 2020 that amounted to about $150-million in benefits that the Department paid out and now wants back.
Hui told the committee Governor Mike Parson (R) has made clear that he wants the Department to seek collection of those overpayments, viewing them as taxpayer dollars that went to ineligible individuals.
Several legislators said they have heard from constituents who have been asked to pay back thousands of dollars in state or federal relief, sometimes months after they received it. One constituent was asked to repay about $23,000.
“You’re going to be hard-pressed to find a more fiscally conservative person in here than me, but I think we screwed up as a state government, to ask folks [for that money] back this late in the game,” said Representative J. Eggleston (R-Maysville).
St. Ann representative Doug Clemens (D) said for Missouri to ask people already struggling financially due to covid to pay back thousands of dollars is wrong.
“Need I remind you of our median income in this state? Most people in my district make $26,000 a year, and you’re asking for $11,000 payback?” said Clemens. “We’re talking about keeping Missouri’s economy going. We’re talking about equity and conscience … [It’s] taxpayers’ money, it’s these people’s money, and frankly we’re in a crisis. They need to keep it.
Representatives, including Raychel Proudie (D-Ferguson), said the reasons given to individuals for their ineligibility were not always clear. She read a letter the Department sent to one of her constituents telling them they had to repay for a “miscellaneous reason.” Proudie called that “unacceptable.”
“As a State of Missouri employee and someone elected, I sincerely apologize that this was the caliber of correspondence you got from a state agency because it tells you nothing … how dare us do that?” said Proudie.
Federal directives have given states the option not to require repayment of assistance from the federal government, which makes up the majority of the $150-million the Department overpaid. Hui explained that Missouri is choosing to seek repayment of federal relief.
Proudie thinks the state shouldn’t be expending its resources to pull money from Missouri’s economy just to send it back to the federal government, and Representative Scott Cupps (R-Shell Knob) agrees.
“It may be as low as only $30-million of it’s from the [state] trust and $120-million of it is federal funds … you are not going to catch Scott Cupps in favor of rounding up money out of Missouri’s economy and sending it to Nancy Pelosi and Joe Biden in Washington D.C.” said Cupps. “The feds are literally telling us, ‘Hey, forgive it. Forgive it.’”
The Department is required by state statute to collect overpayments out of the state fund.
Dan Thacker represents a union including about 500 school bus drivers and monitors. He said many of them make salaries that would put them near the poverty level, yet roughly 400 are being asked to pay back thousands of dollars.
“Now we want to take $9,000, $10,000 back from them? Where are they going to get it? These are hardworking individuals that did nothing wrong or fraudulent. They simply did exactly what was urged for them by the Missouri Department of Labor.”
St. Joseph Republican Bill Falkner said any legislative action will have to balance the waiving of repayment by Missourians with protecting businesses, as some of these overpayments are charged to them.
Committee members also spoke directly to Missourians during the hearing. Cupps said the repayment situation is adding to already heightened stress for struggling Missourians. He wants them to know he and other legislators are paying attention, and are looking for a solution.
“There’s somebody that could get a letter in the mail that could say that they owe the state $7,200 back, and there could be divorces because of this,” said Cupps. “I want people to know this: do not do anything dumb because the state has sent you a letter that says you owe them money. Don’t do it. If you’re stressed out about it stop being stressed.”
Liberty representative Mark Ellebracht (D) asked Hui whether it makes financial sense for Missouri to seek these repayments.
Hui told the committee that Missouri is on pace to need a loan to support the state’s unemployment trust, likely by around June. She did not offer a projection of how great that loan might be. She said this could cause employers to have to pay more, as that loan is repaid.
Witnesses and lawmakers alike suggested that repayment decisions have seemed arbitrary and inconsistent, with some people being ordered to pay back only federal funds, some to pay back only state funds, and some told to pay everything or nothing.
Three Democrats have filed bills to address unemployment relief overpayments: Clemens, LaKeySha Bosley (St. Louis), and Peter Merideth (St. Louis). The committee’s chairman, Jered Taylor (R-Republic) and Representative Cupps are developing proposals.
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