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Governor Rell Urges Swift Change of Federal Labor Laws To Extend Benefits for Unemployed, Provide Relief for Employers

FOR IMMEDIATE RELEASE

October 31, 2009
CONTACT: Donna Tommelleo, 860-884-8472

donna.tommelleo@ct.gov

 

To protect and extend jobless benefits for thousands of Connecticut residents and provide financial relief to employers, Governor M. Jodi Rell is urging the state’s Congressional delegation to push for modifications in the federal unemployment laws and the federal stimulus act, making it easier for states to maintain their unemployment funds.
 

“The clock is ticking on critical federal assistance that has allowed the state to provide extended benefits to those who have lost their jobs in this down economy,” Governor Rell said. “I am asking Congress to move quickly and extend deadlines on federal aid to states, including a provision that temporarily spares employers from paying a higher federal unemployment tax. That is the worst scenario possible for businesses in this climate and could force employers to shed more jobs to pay the additional tax.”

 

Connecticut, likes most states, is borrowing interest-free loans from the federal government to replenish its depleted Unemployment Trust Fund. In a letter written earlier this month to the delegation, Governor urged Congress to push for the following:

  • Stimulus funds to replenish the state’s Unemployment Trust Fund

  • Full federal funding of extended benefits for an additional year to December 31, 2010

  • Extend by one year interest-free federal loans to states until December 31, 2011

  • Delay by one year (until 2012) mandatory tax increases in the Federal Unemployment Tax Act (FUTA) that all employers must pay to support the unemployment insurance program. Under federal law, tax increases are required when a state has outstanding Trust Fund loans for two years.

“By extending full federal funding of benefits to those who have lost their jobs and interest-free loans to states, Connecticut employers will save an estimated $175 million,” Governor Rell said. “The last thing Connecticut employers need now is higher taxes and increased costs of doing business.”

 

The Governor thanked the delegation for their actions taken earlier this year, noting that as part of the American Recovery and Reinvestment Act of 2009 (ARRA), the federal extension funds and the interest-free advances to the state's trust fund have been instrumental in helping Connecticut's workforce and the state’s fiscal health.

 

“I encourage you and your colleagues to direct stimulus funding to state government so that we may replenish our unemployment compensation funds and obviate the need altogether to impose additional financial burdens on our already beleaguered employers,” the Governor wrote.

Media contact: Nancy Steffens  (860) 263-6535


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