Governor Rejects Unemployment Insurance Council’s Request to Veto Changes to Jobless Benefits
The Governor signed the biennial budget bill into law on Sunday, and in the process made 50 item vetoes. Although a few of the vetoes are noteworthy, the changes he made with his veto pen strike me as less significant, or at least less interesting, than the items he decided not to veto.
One area of the budget that he chose to leave alone on Sunday concerns the state’s unemployment insurance (UI) system. The Joint Finance Committee (JFC) added a couple of UI provisions to the bill, including one that makes a newly unemployed worker ineligible for UI benefits until he or she has been out of work for a week. The other change makes people ineligible for unemployment benefits if they lose their employment as a result of refusing a drug test or if a job offer is withdrawn or not extended due to a drug test failure. The Governor signed those changes into law on Sunday, and in the process he rejected the unanimous recommendation of the state’s UI Advisory Council, which argued that enacting changes pushed through unilaterally could “potentially destroy” the Council’s consensus process.
As we noted in a blog post last week, the state’s UI Advisory Council met on Thursday and voted unanimously to endorse a letter urging Governor Walker to veto the changes to the UI system contained in the budget, and to allow the Council to negotiate these issues. The letter was based on the concern that the partisan vote for changes that weren’t developed in a balanced negotiated process could undermine the consensus process that the Council has used for 75 years:
“Unilaterally adopting changes that benefit only one side will potentially destroy the successful policy making model.”
The state must close a deficit of well over $1 billion in the UI Trust Fund. The one-week waiting period will save the state between $41 million and $56 million per year, once it takes effect in January 2012, and it’s a change the Governor had previously endorsed. Thus, the Governor’s signature wasn’t completely unexpected. However, the decision to sign it despite the Council’s unanimous recommendation for a veto is no small matter.
The Council’s letter to the Governor indicates very clearly that the decision to enact changes made unilaterally, rather than through the usual consensus process, could be a severe and potentially fatal blow to the non-partisan process of negotiated agreements, which has served Wisconsin well for 75 years. The long-term fate of the consensus process is still unclear, but in the shorter term I think it’s safe to say that it will now be even more difficult for the Council to reach an agreement on the tough medicine needed to close the huge UI deficit.
The Governor’s veto message doesn’t specifically mention the deficit or the future of the Council, but he said “I applaud the Legislature for their decisive action” on the one-week waiting period. (In addition, the veto message says he fully supports taking the federal funding for extended benefits, and he calls on legislators to “act on the council’s recommendation and modify Wisconsin laws to allow the state to take advantage of these additional federal funds.”)
Passing the one-week waiting period is a victory for the Governor and legislators who championed that cost-saving measure, but it may mean that those lawmakers should begin figuring out the next steps for closing the UI deficit, rather than anticipating that the Council will be able to develop a consensus agreement that could have made the jobs of those elected officials much easier. Perhaps conservative legislative leaders relish that opportunity.