Legislation approved to stop drops in unemployment benefits

Tax on businesses suspended

Bill would hide tax breaks from public
Louisiana legislators convene in the House of Representatives chambers at the State Capitol during the 2020 special session. (Wes Muller/LA Illuminator. Wednesday Sept. 30, 2020)

Thanks to new legislation that passed both chambers of the Louisiana Legislature, weekly unemployment benefits for laid-off workers will remain at current rates, and businesses will not be subjected to a tax hike to replenish the state’s depleted unemployment trust fund.

Lawmakers approved Senate Concurrent Resolutions 5 and 9, which stop unemployment benefits from decreasing and suspend an automatic tax hike on businesses, respectively. 

Gov. John Bel Edwards has supported these efforts. With an executive order, he had already suspended the business tax hike until June 30. The legislature’s vote extends that action until August. 

The business tax is one of several that is supposed to be automatically triggered whenever the state’s unemployment trust fund falls below a certain threshold.  

A reduction in benefits to those who claim unemployment is also usually triggered, but the legislature voted to keep those benefits at the current level. That suspension will also be in effect until August.

 Louisiana offers a maximum of $247 per week in unemployment compensation, one of the lowest benefits packages of any state in the country. Moreover, Louisiana’s “average weekly benefit of $216 is the lowest in the country when measured as a percentage of the median wage,” according to Jan Moller, executive director of the Louisiana Budget Project. 

Prior to the COVID-19 pandemic, the state’s unemployment trust fund had $1.1 billion, but the  fund ran completely dry this month. 

The state is borrowing money from the federal government to continue paying out benefits. Legislators don’t yet have a plan to replenish the trust fund for the long term, though house representatives on Wednesday plan to discuss House Concurrent Resolution 36, introduced by Rep. Rodney Lyons, D-Harvey. That resolution would create a task force to study ways to replenish the fund. 

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