Legislature Continues to Pursue Unemployment Insurance Extension 

Michigan lawmakers continue to be under tremendous pressure from labor unions to move a costly proposal to further extend unemployment insurance (UI) benefits. In fact, we believe a reform bill we support (HB 4408), which would require the Unemployment Insurance Agency to more aggressively pursue UI fraud, may be negatively amended on the House Floor later this week to include the UI extension.  Please contact your State Senator and State Representative today and urge them to oppose this extension and support HB 4408 as introduced.

The UI extension proposal being circulated would allow Michigan to use a three-year look-back period to expand the window under which unemployed workers can collect regular extended unemployment benefits (weeks 79-99). We estimate that this proposal could cost upwards of $500 to $900 million in 2011 alone. Make no mistake: This proposal is short-sighted and will result in a tax increase on Michigan job providers and more government debt. 

This proposal is being provided through the Extended Unemployment Compensation (EUC) Account, a federal account funded from Federal Unemployment Tax (FUTA) dollars. This account is itself already in deficit and borrowing from federal general revenue with interest (i.e., similar to the situation with our State's UI Trust Fund). The bottom line is that, because this proposal contains no off-setting cost savings, employers will pay higher FUTA taxes for longer periods of time to pay for these additional EB benefits; these benefits are not free. Of course, the higher FUTA taxes linked to this proposal would be in addition to the higher FUTA taxes Michigan employers are already paying to pay down Michigan's $3.8 billion debt to the federal government.  

While we understand the need to help displaced workers, this proposal is not the right solution. Please contact your legislator today and urge him or her to oppose this very expensive, one-sided bill - and support HB 4408 as introduced.

Send Action Alert now.

Lt. Governor Brian Calley last week provided detailed information to the House Tax Policy Committee about House Bill 4361 and House Bill 4362 (Gilbert, 81- Algonac) where he discussed changes to both business taxes and individual income taxes. The Michigan Chamber has expressed support for the Governor's tax reform proposals.

The Michigan Chamber recently asked Lt. Gov. Calley to discuss the Governor's tax reform plan on video. The exclusive video is available on the Michigan Chamber's online Briefing Center.  

Last week, the Michigan Chamber testified in support of the Governor's tax reform proposal (House Bills 4361 and 4362). The testimony is available here.