Midlands Voices: Stimulus boost key for Nebraska

The writer is a community educator for the Nebraska Appleseed Center for Law in the Public Interest.

Nebraska’s unemployment insurance system provides essential support for working people in times of economic uncertainty. The state’s unemployment insurance program aids many families during periods of unemployment by providing benefits that help them to make the mortgage payment, buy groceries and manage other day-to-day expenses.

Nebraska now has a unique opportunity to modernize this program that is so important to so many, and to improve the system and decrease business taxes while we are at it.

There is $43.6 million in federal funding still available from the American Recovery and Reinvestment Act if our state makes changes to update our unemployment insurance program.

These changes would help 2,100 Nebraskans become newly qualified for benefits. Nebraska workers, the unemployment insurance program and businesses all stand to benefit from these changes.

First, more deserving workers would become eligible for benefits. The Recovery Act dollars are available to states that take steps to modernize their programs by making changes that allow more part-time and low-income workers to qualify. States also must choose two options from a list of alternatives that would help other workers qualify, such as those working part-time or people leaving work to care for an ill family member.

Second, the Recovery Act funding could be used to update administrative systems. The recent federal extension of the time period that people can receive unemployment benefits has put added strain on Nebraska’s administrative systems. The Recovery Act money could be used to develop new computer systems that would ease the pressure now and better prepare the state to respond to claims in the future.

Third, the National Employment Law Center estimates that taking the federal funds would decrease business taxes by between $17 million and $18 million next year and increase the overall funding in the trust fund.

Additionally, because most unemployment insurance payments are spent immediately on basic needs, it would provide a real boost to local economies. According to one Department of Labor review, unemployment benefits contribute $2.15 in economic growth for every dollar of benefits.

In the Recovery Act, Congress has recognized the value of the unemployment insurance program and acknowledged that the old system is unfair to hardworking people and no longer fits the more mobile work force of today.

The Recovery Act provides funds to update state programs and make necessary changes. Iowa, Kansas and 26 other states have chosen to modernize their programs and take Recovery Act dollars.

Some Nebraska leaders have hesitated to make the change due to concern over possibilities for increases in business taxes. However, the additional federal funding would decrease taxes in the short term, and Nebraska Department of Labor analysis shows that tax rates would be comparable in the long term. Further, Nebraska’s unemployment rate overall continues to be one of the lowest in the nation even amid the recession.

Nebraska has a historic opportunity to do what’s right for the families hardest hit by unemployment in our state. Modernizing the program using Recovery Act dollars is a choice that would ensure a safety net for deserving working people.

Further, these changes would help reform our unemployment system to meet the new challenges of the 21st century, boost our local economies and decrease business taxes — all using federal stimulus dollars. The governor and the Legislature should put our families first by modernizing our unemployment system and accessing these stimulus dollars.

Let’s make the change and put Nebraska values — and federal dollars — to work.

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