State lawmakers took a first step Wednesday toward making more out-of-work Coloradans eligible for unemployment benefits as their ranks swell to their highest levels in 20 years.
Though the legislation promises to attract $127 million in federal money, critics said it would strain the state’s unemployment insurance fund at its most vulnerable moment and drive up costs for businesses.
State analysts expect the insurance fund to drop from $600 million to about $40 million by the end of the 2009-10 fiscal year.
But bill proponents such as Kathy White of the Colorado Fiscal Policy Institute said the effect of paying out more money from the fund would be minimal.
“It’s a very small group of people, but it really matters to those people,” White said. “These are very low-income earners or recent-entry workers.”
Senate Bill 247 changes the way people qualify for the insurance benefits by allowing more workers with spotty employment histories to get payments.
Nineteen other states have similar laws.
The legislation would also draw $15 million from the insurance fund over three years to retrain out-of-work employees in new fields.
The bill tweaks rules that already allow people who quit jobs for personal reasons — such as caring for sick relatives or because of domestic-violence complications — to collect benefits as well.
Opponents say it goes beyond what federal authorities require to receive the stimulus money.
In addition to the training money, the legislation would cost the state about $20 million in the next two years, according to state analysts.
Every dime coming out of the fund counts, said Virginia Morrison Love, representing business interests through the Colorado Competitive Council.
What businesses pay into it depends on the balance in the fund, and the lower it drops the more they pay.
“We cannot afford to make this bill a Cadillac model beyond the bare requirements of the federal government,” Love said. “We can’t be overly generous to a few. We need to protect everyone.”
The bill passed 5-1 to the Senate Appropriations Committee.
Jessica Fender: 303-954-1244 or jfender@denverpost.com
