Unemployment Insurance Council Unanimously Urges Veto of UI Changes in Budget Bill

Thursday, June 23, 2011 at 10:03 PM by

Labor and Management Agree to Negotiate – Reports Indicate the Sky Hasn’t Fallen

The state’s Unemployment Insurance Advisory Council met today to consider a number of issues, including provisions relating to unemployment insurance (UI) benefits that were added into the state budget bill by the Joint Finance Committee. As the Wisconsin Budget Project wrote in a June 14 blog post, this move was a departure from the usual process of changing the state’s UI system. Under the usual process, the Unemployment Insurance Advisory Council, made up of half labor and half management representatives, comes to a consensus on issues and makes recommendations to the Governor and Legislature for any changes to Wisconsin’s jobless benefits or UI financing.

The Council voted unanimously today for a letter drafted by James Buchen and Phil Neuenfeldt, leaders of the management and labor sides of the Council respectively, 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 veto request was not based on the substance of the changes contained in the budget bill, about which the two sides disagree, but rather on the process under which the changes were advanced. The letter says that any UI changes should be made within the consensus process of going through the Council, which it says has served Wisconsin well for 75 years. As the letter states:

“Unilaterally adopting changes that benefit only one side will potentially destroy the successful policy making model.”

It remains to be seen whether the Advisory Council can reach a consensus in the months ahead on the extremely challenging matter of how to close a shortfall of about $1.3 billion in Wisconsin’s UI Trust Fund. If the Council can develop a compromise that it recommends to the Legislature, that makes the tough policy choices far easier for legislators and the Governor. Conversely, if lawmakers reject the consensus model or contribute to its demise, they will have to take complete responsibility for the UI benefit cuts and/or employer tax increases that will be needed to close the very substantial UI deficit.

With those considerations in mind, it will be extremely interesting to see what Governor Walker does when he signs the budget bill this Sunday and makes his item vetoes.

Jon Peacock and Ben Nerad

Categories: 2011-13 biennial budget, Blog, unemployment benefits | Comments Off on Unemployment Insurance Council Unanimously Urges Veto of UI Changes in Budget Bill

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