JournalStar.com reports that state leaders are still pondering whether to accept a portion of available federal stimulus funding — “about $43.6 million that could be used to help pay for unemployment benefits.”
The drawback? Accepting the federal funding comes with a federal mandate to expand unemployment insurance benefits, which would almost certainly lead to “higher future costs” — all of which would be shouldered by Nebraska businesses. According to the Journal Star, “the state can get the money by improving the state’s unemployment benefits in two of four specific categories.”
The article notes that “labor leaders support the improved benefits and don’t see any reason to dawdle. … State business interests are still weighing the options, looking for a route that won’t lead to higher unemployment taxes in the future.”
According to the story, “Gov. Dave Heineman, who must ask for the money, says he’s not interested in this stimulus funding if it requires an eventual tax increase. … (L)abor and business interests have at least another year to come up with a solution.”
Ron Sedlacek, General Counsel for the Nebraska Chamber of Commerce & Industry told the Journal Star, “It would be a simple decision if the only issue was putting money into the unemployment trust fund.” But accepting the federal money with strings attached “could lead to a permanent tax increase. And seeking the money will require changes in state law, he noted.”
Several other states have said they don’t want the federal unemployment money “because of the potential future cost of raising benefits.