A 2nd GOP-backed measure to increase unemployment benefits in Arizona advances at Legislature

Andrew Oxford
Arizona Republic
A spike in unemployment amid the COVID-19 pandemic has added urgency to the issue after lawmakers left current payment levels untouched for years.

A second proposal to boost Arizona’s unemployment benefits has advanced at the Legislature, but the additional dollars would come with a reduction in how long workers could receive benefits.

Senate Bill 1411 would increase the maximum weekly benefit to $320, from $240 per week.

That is $20 more than included in a separate bill approved by a House committee last week and would take effect in three months after the legislative session's end, instead of at the start of 2022.

Like the House bill, the Senate measure also would increase the amount of money Arizonans can earn every week without a reduction in unemployment benefits, to $160 from $30.

While legislators in both parties have raised concerns about details of the measure, a spike in unemployment amid the COVID-19 pandemic has added urgency to the issue after lawmakers left current payment levels untouched for years.

“I think COVID made everyone realize Arizona is way behind the times when it comes to doing the unemployment benefits,” Senate President Karen Fann, R-Prescott, told the Senate Appropriations Committee.

Passed out of the committee on a vote of 9-1, the proposal is an amendment Sen. Vince Leach, R-Saddle Brooke, made to a bill Fann is sponsoring. Only Sen. Michelle Ugenti-Rita, R-Scottsdale, voted against the measure.

Unlike the House bill, the Senate measure also would reduce the length of time that out-of-work Arizonans could receive unemployment benefits. That would drop to 20 weeks from 26 weeks if the unemployment rate is under 6% on average for a quarter of the year. It also includes an exception for a state of emergency, such as the current pandemic.

"We need to encourage people to go back to work, not just sit around and collect until they run out," Fann said.

The Grand Canyon Institute, which has argued for increases in Arizona's unemployment insurance benefits, maintains there is no evidence that the size of payments affects the amount of time a worker remains on unemployment insurance.

The institute also has raised concerns that relying on unemployment data over a calendar quarter to determine when benefits should end could cut off support to some workers who were unemployed at the start of an economic downturn, as rising unemployment would not yet be reflected in the data.

Employers would pay for the changes. The bill would increase the share of wages that are taxed for unemployment insurance to $8,000 from $7,000 starting next year. That share would increase to $9,000 in 2023.

That tax has not been changed for decades but the provision has raised concerns among some Republican lawmakers. Major business groups, such as the Arizona Chamber of Commerce and Industry, are neutral on the bill.

The measure also would require the Department of Economic Security, which was strained when it was hit with a deluge of unemployment insurance claims, to verify eligibility using data from third parties.

Backers argue such steps are aimed at helping curb a slew of fraudulent unemployment claims.

But some members of the committee raised concerns that the Department of Economic Security’s work — not just the claimants seeking assistance — require more scrutiny after out-of-work Arizonans struggled to get answers from officials about their unemployment claims and the agency froze payments to many qualified applicants.

“Along with the large amount of fraud that occurred, there were people who by no fault of their own lost their jobs and still haven’t received unemployment. So there are huge problems on both sides of this with DES,” said Sen. Lisa Otondo, D-Yuma.

Contact Andrew Oxford at andrew.oxford@arizonarepublic.com or on Twitter at @andrewboxford.