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Missourians May Get to Keep Erroneous Unemployment Payments

As a way to keep money in the state’s economy, lawmakers have introduced several proposals that would allow those who mistakenly received unemployment benefit payments to keep the money, instead of returning it.

(TNS) — Legislators are taking action after Gov. Mike Parson's administration resisted calls to let Missourians keep unemployment benefits they were paid in error.

The House Special Committee on Government Oversight on Wednesday heard seven separate proposals to forgive the return of unemployment payments mistakenly given to people who did not intend to commit fraud.

Committee Chair Rep. Jered Taylor, R- Nixa, said the committee will likely combine several of the bills, some of which are nearly identical, into a single proposal. The committee would then hold a vote on the proposal early next week.

Most of the legislation focused on funds from the federal government. Since national stimulus packages have explicitly allowed states to waive repayment, crafting legislation to do so is relatively simple. No committee members or witnesses objected to the idea. A representative of the Missouri Budget Project, a left-leaning think tank, testified in favor of all of the legislation.

"I don't think there's anybody in this room that, if they're being honest, is in favor of getting money out of Missouri's economy and sending it back to Washington, D.C.," said Rep. Scott Cupps, R- Shell Knob, the sponsor of one of the proposals.

Committee members and bill sponsors cited estimates that 75-80 percent of overpayments are federal. Much of the conversation at the hearing focused on what to do about the 20-25 percent that came from Missouri.

A proposal sponsored by Rep. Ian Mackey, D- St. Louis, would stop the state from collecting any excess payments, including those from the state.

Mackey also said 40 states already waive unemployment overpayments that are the fault of the state, even under normal circumstances.

Cupps said the state unemployment money doesn't come from taxpayer dollars, but rather an insurance program that businesses pay into. He argued that not all small businesses could absorb the additional cost that would come from waiving the state repayments.

If the federal repayments are waived, returning 20-25 percent of the money over the course of several years, interest-free, would be a much lighter burden for individuals, he said.

Rep. Mark Ellebracht, D- Liberty, said that even repaying a smaller amount of money could be more difficult for some individuals than for businesses, which may have lines of credit more readily available to them.

"I'm asking us to seriously consider as a committee, which one do we value more?" he said.

Cupps and Rep. Raychel Proudie, D- Ferguson, said not all business owners are able to handle the added expense. Some of her constituents are business owners who are also single mothers and who have reached their credit limits, Proudie said.

Others pointed out that there might be a third option — the state covering the cost of waived repayments so neither individuals nor businesses have to worry about them.

Some committee members were initially skeptical of the idea.

Cupps, who is also on the House Budget Committee, asked, "Where do you want me to take it from?" when Rep. Tony Lovasco, R- O'Fallon, suggested the Legislature could find about $25 million to give to the unemployment fund.

Giving state money to the fund could also ruin its "integrity" by setting the precedent that it is an entitlement program rather than an insurance program, Cupps said.

But both Cupps and Rep. J. Eggleston, R- Maysville, expressed openness to the idea that funding could come from federal CARES Act money after Rep. Peter Merideth, D- St. Louis, explained why that could be possible.

Though Merideth spoke about state repayments, his proposal is a resolution calling on Parson to forgive the federal repayments.

Merideth said he would support legislation waiving the repayments, but "this is not something we actually need legislation to do at all ... the state actually has authority to forgive these overpayments."

Parson "may be up to do it if he has our backup and a clear expression from us as a Legislature that that's what we believe," Merideth said.

Parson's administration has so far resisted calls to waive repayment of money the government sent to people that turned out not to be eligible.

Parson said Jan. 28 that those who mistakenly received payments should "most certainly" be required to return the money. He has held to that position, and Missouri Department of Labor Director Anna Hui defended the stance at multiple committee hearings last week.

"If they are not eligible, it is not their money," she told the House Budget Committee.

(c)2021 the St. Louis Post-Dispatch. Distributed by Tribune Content Agency, LLC.

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