JEFFERSON CITY—Senate leaders spoke out today against the governor’s veto of Senate Bill 673, calling it short-sighted. They say the veto does nothing to prevent future problems, but rather it protects the governor from admitting he and his administration were perfectly content to let businesses pick up the tab for their reckless borrowing.

Senate Leader Tom Dempsey, R-St. Charles, said while it’s good the state has finally paid off its unemployment insurance debt, there are no safeguards in place for Missouri businesses should the economy take another bad turn.

“This bill would have helped prevent Missouri from having to borrow from the federal government again,” said Dempsey. “Without protections in place, we are putting our businesses at risk to foot the bill if we experience another recession.”

When the economy faltered in 2008, Missouri joined numerous other states in borrowing from the federal government to cover an influx of unemployment claims. Because Missouri failed to pay back the money it borrowed to the federal government in a timely manner, Missouri employers have been assessed a penalty to pay back Missouri’s debt. Instead of being able to hire more employees or expand their businesses, employers were sending more and more money to the federal government.  For the past two years, the General Assembly has taken action to stop these harmful penalties on Missouri employers, and for the last two years, the governor has vetoed these efforts. 

Senate Bill 673 would have also modified the duration for an individual to receive unemployment compensation based on the state’s unemployment rate. The unemployment rate as of May 2014 was at 6.6 percent. If the governor had signed Senate Bill 673, individuals who are unemployed would have received 15 weeks of benefits. Under current law, the duration of unemployment benefits is 20 weeks.

“Tying the length of benefits to unemployment rate makes sense,” said bill sponsor Sen. Mike Kehoe, R-Jefferson City. “When more jobs are available, less assistance is needed. This is just another instance in a long line of instances where the governor and his administration believe that they can spend Missourians’ money better than Missourians can.”

“This measure would have also increased the cap of the UI Trust Fund to $870 million so Missouri would have been able increase the fund balance during periods of economic growth to help prevent the need for additional borrowing in the event of another economic downturn,” said Dempsey. “Higher taxes of any kind on businesses reduces the amount of jobs available across the state.”

The General Assembly will convene for the annual veto session on Sept. 10, 2014. At that time, the Legislature can attempt to override the governor’s vetoes. To learn more about this bill and other bills or to track their progress, visit www.senate.mo.gov.