Senator Lucio's Letterhead

FOR IMMEDIATE RELEASE
February 4, 2009
CONTACT: Doris Sanchez, Press Secretary
Phone: (512) 463-0385

Joint Bills Improving Unemployment Benefits Would Bring Texas Millions in Federal Funds

Austin, TXSen. Eddie Lucio Jr. of Brownsville recently filed Senate Bill (SB) 573 and co-authored SB 377 to change unemployment eligibility in Texas, qualifying the state for over $530 million in federal stimulus funding, authorized through the Unemployment Insurance Modernization Act.

"I filed SB 573 in 2007 to bring added fairness to unemployed Texans," explained Sen. Lucio. "The re-filed legislation is especially timely today because it will give us access to over $500 million in federal funding."

Sen. Lucio's bill will allow the government to use a worker's most recent earnings to calculate eligibility for unemployment benefits. Currently, the last three to six months of a worker's wages are disregarded, a practice stemming from a time when unemployment insurance claims were processed manually. This policy discriminates against low-wage earners in Texas, hindering the state's economic recovery. The federal government requires that Texas change this policy to become eligible for an estimated $530 million. If Sen. Lucio's bill is passed, Texas will immediately receive one-third of these stimulus dollars

The release of the remainder of these funds is contingent upon Texas modernizing its unemployment insurance system further. SB 377, filed by Sen. Leticia Van de Putte and co-authored by Sen. Lucio, will expand the provision of unemployment insurance benefits to part-time workers who are searching for part-time work. Research indicates that Texas' unemployment insurance policies keep people unemployed longer because a significant portion of the workforce--especially women and minorities--must often seek part-time work. Low-wage earners, women and part-time workers who receive unemployment insurance are most likely to spend this money on basic necessities, such as housing and groceries. Consequently, every dollar of unemployment insurance spent is estimated to have a return of $2.15.

"These two measures will benefit vulnerable workers in our state, as well as small businesses." Sen. Lucio added. "It is critical that we act swiftly to assist Texans struggling to support themselves and their families."

The cost of implementing these reforms, an estimated $38 million per year, represents a significant savings for Texas businesses. Since Texas' unemployment fund is now below the state's own required minimum level, businesses will be taxed to make up the fund's estimated shortfall of $467 million. SB 573 and SB 377 will help restore Texas' unemployment fund so that businesses will not be burdened with this additional tax.

"Reforming Texas' unemployment insurance is a quick and intelligent way to bolster the Texas economy. For the sake of individual Texans and the vitality of our business community, we must act now," concluded Sen. Lucio.

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