Missouri governor signs extension of jobless benefits

JEFFERSON CITY, Mo. -- Thousands of Missouri residents cut off of long-term unemployment benefits will soon get federal payments again as a result of legislation signed Wednesday by Gov. Jay Nixon. But anyone laid off beginning next week will see their state jobless benefits reduced.

With its new unemployment law, Missouri will end its distinction as the only state to have voluntarily joined and then quit a federal program that provides extra benefits to people unemployed for at least a year and a half. But Missouri will gain a new distinction as the second state -- following Michigan -- to trim state-funded jobless benefits from 26 weeks to 20 weeks.

The cut in state benefits was part of deal to end a filibuster against the federal benefits by four Republican state senators upset about federal spending and deficits. Republican Senate leaders also pledged to help identify up to $250 million of cuts to federal stimulus projects in Missouri, though neither the Democratic governor nor the GOP-led House has signed off on that part of the agreement.

Nixon had urged lawmakers to reauthorize Missouri's participation, which ended April 2, in a federal program that provides up to 20 weeks of additional jobless benefits for people already out of work for 79 weeks. He accepted the reduction in state benefits reluctantly.

"For thousands of Missouri families struggling to make ends meet now, it was vital that we provide extended assistance to these families immediately," Nixon said while signing the legislation.

He said retroactive payments should be made by Friday or Monday to about 10,000 people who lost benefits when Missouri's participation in the federal program ended. Benefits also can start flowing to an estimated 24,000 people who are projected to become eligible for the extended federal payments in the next nine months. At stake is an estimated $105 million in federal benefits for Missouri residents.

But the reduction in state-funded benefits is projected to mean $108 million less annually for Missouri residents. That reduction kicks in for anyone laid off Sunday or later.

The National Employment Law Project, which had advocated for the extension of federal benefits, had urged Nixon to veto the bill because of the cut in state benefits.

The Missouri Chamber of Commerce and Industry claimed that it played a key role in brokering the compromise to extend federal long-term jobless benefits in exchange for limiting future state-funded benefits. It said businesses, which pay into Missouri's unemployment insurance trust fund, could see a savings of as much as 23 percent because of the change.

"This tax cut can be used directly by businesses to create and retain jobs in Missouri," said Dan Mehan, president and CEO of the chamber.

As of late March, 32 states had borrowed a total of more than $46 billion from the federal government to pay jobless benefits because their state funds had run out of money, according to the National Conference of State Legislatures. The state labor department said Missouri owes $873 million to the federal government for jobless benefits paid as of last week.