Missouri House Approves Unemployment Overpayment Forgiveness Plan
Updated March 4 with House giving final approval
The Missouri House overwhelmingly passed a measure on Thursday that would forgive federal unemployment overpayments for some residents.
The bill passed 157-3. At the suggestion of the bill's sponsor, Rep. J. Eggelston, R-Maysville, the chamber chose not to adopt an emergency clause, which would ensure the law takes effect after two weeks if Gov. Mike Parson signs the proposal. He said he feels comfortable dropping the clause because he received assurances from the Department of Labor that it would no longer seek repayment.
“So this means that they will not be hassling folks for the federal portion, exactly what’s in our bill,” Eggelston said. “They will still try to recoup the state portion, on an easy payment plan.”
The drew criticism from many Democrats in the chamber, saying the state’s labor department has already begun to garnish wages and withhold tax returns for those who have received the additional payments at no fault of their own.
State Rep. Peter Merideth, D-St. Louis, said legislators were “getting played by the governor’s office.”
“If we take this emergency clause off of this, we aren’t making him do anything,” Merideth said. “It’s back in his power to decide whatever the hell he wants to do, and he’s already shown us what he wants to do: collect this money back and punish the people that received it.”
Parson has said he believes Missourians should pay the money back, but also that he is receptive to the legislation. He said at a press briefing on Thursday that he would not agree to a “blanket policy” that forgives everyone, including those who have committed fraud. Labor department officials said less than 3% of the 46,000 people committed any kind of fraud.
While the emergency clause did not get enough votes to pass, some are hopeful the Senate will add it on. There is also bipartisan support for the Senate to include language that would forgive the state portion of the overpayments if it can be paid for using federal coronavirus relief funds.
Original story from March 1:
The Missouri House of Representatives on Monday gave initial approval to a bill that aims to waive repayment of the federal portion of unemployment overpayments the state is demanding from more than 46,000 people.
The Missouri Department of Labor and Industrial Relations last year accidently paid out $150 million to people it later determined weren’t eligible. About 80% of that money came from new federal unemployment programs.
State lawmakers have been calling on the governor to let people keep the money. The federal relief package from December gave states the ability to waive repayment of the federal money if collecting it would be contrary to “equity or good conscience.” But, in a Missouri House committee meeting last month, the labor director said that a state law requires collection, and that if people don’t repay the money they could have their wages garnished.
Rep. J. Eggleston, R-Maysville, said the bipartisan bill he sponsored will fix that. It’s a combination of seven bills discussed in committee brought by Republicans and Democrats.
He said the bill will significantly reduce the burden on Missourians, many of whom are facing collection notices for several thousand dollars. Eggleston said the constituents he heard from already spent the money on living expenses to stay afloat during the pandemic.
The bill would not waive repayment for cases involving fraud, about 3% of the total cases.
“It doesn’t make a lot of sense to use state employees and state resources to recoup money from our citizens only to send that money to Washington D.C. — especially when the feds aren’t asking for it back,” Eggleston said Monday during debate on the House floor.
Under the terms of the bill, the department would still collect the state portion of the overpayments, about $40 million. That money would go back to the state trust.
Eggleston said people would be able to pay back that money without penalty or interest, on a case-by-case basis with the department, which is already offering such plans.
“While we want to offer them significant relief, they will need to pay back some of the money, and the federal-state split is the ideal line to draw that distinction,” he said.
Some people are appealing the department’s overpayment distinction. Other Republican representatives have expressed concern that fighting appeals will be costly to the state.
No representatives spoke against the bill, but several Democrats pressed Eggleston to adopt an amendment that would waive repayment of the state portion too.
Rep. Ian Mackey, D-St. Louis, sponsored the amendment, which lost on a 95-53 vote.
“We can lift 80% of it. What good is that going to do for someone who is poor, who can’t pay $800 any more than they can pay $4,200? We have got to forgive 100%,” he said. “It was our fault, and these folks absolutely deserve us shouldering this burden so they don’t have to.”
Eggleston said he wanted to pass the bill that’s most likely to give people immediate relief. He worries that by not collecting the state portion, the Legislature would shift the financial burden to employers who pay into the state trust.
“Let’s do what we know we can do and give some real relief to some folks because the vast majority of this money is federal money,” he said.
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