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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Our View: Jobless benefit changes would burden businesses

With unemployment over 10 percent in Spokane County and almost that high statewide, Washington lawmakers should be working to facilitate and sustain a recovery, not hinder it.

Case in point: Senate Bill 5963 began as a reasonable attempt to bring the state’s unemployment insurance system into compliance with federal requirements, but it has been amended into an anti-business message that will make it harder to create jobs now and after the economy turns around.

Washington’s unemployment compensation is one of the most generous in the country. Employers, who foot the full cost of paying state unemployment benefits, are the sixth-highest taxed, and unemployed claimants collect the fifth-highest benefits.

Business interests from Boeing on down have flagged Washington’s unemployment insurance program as a major disincentive to setting up shop here. Although the aircraft maker already has moved its headquarters to a friendlier climate in Chicago, it still supports an estimated 285,000 direct and indirect jobs in this state. The Washington Alliance for a Competitive Economy calculates that personal income in Washington would fall by almost 9 percent if Boeing should pull out entirely.

The pressures that bear on Boeing have a similar impact on all businesses – businesses that will be needed to preserve and create jobs and pay taxes and otherwise fuel economic expansion.

SB 5963, as introduced, would not have reduced anybody’s benefits, although it would have resulted in a higher assessment against businesses that laid off workers. It also would have undone the damage of a court ruling that recklessly expanded the circumstances in which a person could quit a job and still qualify for unemployment benefits.

What have lawmakers done with this measure? Instead of repairing the Supreme Court’s damage, they have ratified it. And they liberalized the way benefits are calculated, a step that will speed the drawdown of the unemployment compensation trust fund and drive up payroll taxes, making it costlier to hire workers.

Last December, the trust fund was a robust $4 billion, the healthiest in the nation, Gov. Chris Gregoire boasted at the time. There was enough in the bank then to cover 21 months of benefits, but that projection has fallen to 18 months. Worsening economic conditions, coupled with increased benefits, will only accelerate the depletion, which can be countered only by raising payroll taxes.

That, of course, reduces the capacity to hire workers.

We understand lawmakers’ desire to ease the pain of joblessness. But the biggest favor the state can do workers is to establish conditions that favor job creation.

Before the Legislature adjourns next weekend, the Senate needs to take another look at Senate Bill 5963, restore it to its original intent, and send it to the governor untainted.