Editorial Roundup: State should shore up insurance fund ASAP

Published 8:50 pm Friday, February 18, 2022

Businesses small and large and the people they employ will be hurt by huge increases in unemployment insurance if Minnesota legislators don’t step in with relief as promised.

Democrats and Republicans agree the $1.2 billion deficit in the state unemployment insurance fund should be paid with funds from COVID relief and the state’s $7.7 billion surplus. The insurance fund, of course, ran dry with the pandemic putting hundreds of thousands of Minnesotans out of work.

The unemployment benefits are paid by taxing employers based on their layoff history and the number of employees they have. In normal times, this system works well, and employers know there is a cost for laying off workers. At the same time, it builds up a fund to mitigate big declines in the economy as laid off employees get benefits to continue keeping food on the table.

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But the pandemic was not a normal time. The fund went into deficit. Now it makes sense to replenish and rebuilt it to its previous balance of about $1.7 billion. An in-depth report in Sunday’s Free Press showed some local employers facing a 130% increase in unemployment insurance rates costing them an additional $21,000. Another would pay an additional $28,000.

Gov. Tim Walz and Senate Republicans propose shoring up the fund with a $2.7 billion infusion of COVID aid money and some state surplus money.

The Senate passed the bill on a strong bipartisan vote 55-11 on Monday.

House DFLers favor simply erasing the deficit in the fund with a $1.2 billion infusion and allow business taxes to build up the fund. They also have debated tying their approval of funding to other bills such as front line worker payment legislation that stalled out last year.

And, one House DFLer, Gene Pelowski of Winona, held a press conference with Republicans opposing the House DFL plan. Pelowski favors passing the $2.7 billion bill to replenish and build back the fund without tying it to other legislation. We agree with him. The unemployment insurance fund relief should be a stand-alone bill.

Democrats tried to amend the Senate bill on Monday to include pandemic worker relief but were not successful.

Pelowski and Senate Republicans have the better, more commonsense plan to replenish the unemployment insurance fund. This shouldn’t be about gaining leverage in some political maneuvering that people increasingly find tiresome. It’s about getting businesses and employees back to work and back in business.

—Mankato Free Press, Feb. 16

About Editorial Roundup

Editorials from newspapers around the state of Minnesota.

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