Pennsylvania’s Unemployment Compensation Trust Fund
March 25, 2009

Hello, I’m Gene Barr, vice president of the Pennsylvania Chamber of Business and Industry. Welcome to the first Pennsylvania Chamber Minute.

Each month, we’ll provide a brief video update to you on the most critical issues and potential policy changes from the state Capitol that directly impact your business’s bottom line and competitiveness. We hope you find these messages of value, and we welcome your feedback.

An immediate concern facing employers of all sizes is the financial condition of Pennsylvania’s Unemployment Compensation Trust Fund, which could be facing a $1 billion deficit by the end of this year. In simple terms, more money is being paid out of the fund than has been coming in.

This is attributed to the liberalization of benefits over recent years – a situation that has certainly been exacerbated by the current economic downturn.

In fact, Pennsylvania is second only to California in the amount of UC benefits paid out over the past year, despite an unemployment rate that is lower than most states across the nation.

Adding to these concerns are the costly strings attached to Pennsylvania’s acceptance of federal stimulus dollars. Requirements for expanded UC benefits would be imbedded into the system, meaning that Pennsylvania would be forced to fund these costs after federal money runs out.

As a member of the state’s UC Advisory Council, the Pennsylvania Chamber is currently working with the Rendell administration on a solution to these solvency concerns, and is fighting the attempt by some to have employers bear the full tax burden.

Employers and employees want a fair UC system that provides predictability for employers while adequately compensating deserving employees.

That’s why the Pennsylvania Chamber is using this opportunity to urge lawmakers to make important structural changes to the UC system, as well as enact commonsense reforms that will help lower costs over the long-term – reforms such as making sure people receiving benefits are not unemployed due to their own misconduct; and are actively taking steps to find employment.

You can add emphasis to the message we are sending to elected officials on behalf of businesses throughout the Commonwealth. Tell your state lawmakers that you support commonsense reforms to help bring down long-term UC costs.

And thank you for sharing a minute of your time with the Pennsylvania Chamber—the statewide voice of business.