Jobless funding overhaul passes

A major overhaul of New Mexico’s unemployment insurance system that could raise premiums slightly but will end the annual legislative debate was unanimously OK’d by the House on Thursday and is on the way to Gov. Susana Martinez who is expected sign it.

SB 334, sponsored by Sen. Stuart Ingle, R-Portales, would replace the existing method of calculating unemployment insurance premiums with one based on the type of business the company is in, its own experience and a factor to raise or lower premiums to keep the UI fund solvent. That’s according to Greater Albuquerque Chamber of Commerce CEO Terri Cole.

“The bill will provide consistency and certainty to the business community, both of which have been missing in the schedule-setting process in the past,” Cole said.

A Legislative Finance Committee analysis estimates the new approach would raise an average employer’s premium 0.21 percent over the premium schedule in place today. However, if the current law remains in place premiums are expected to increase a total of $141.9 million in 2013 to about $448 million, compared to premiums estimated to be $302.2 million under the SB 344 approach.

UI rates today are based on an employer’s experience and on the ratio between the balance in the unemployment insurance fund and covered wages at the end of the previous calendar year.

LFC analysts said the approach produces unfair premiums and does not allow the premiums to adjust quickly in response to the fund’s balance.

SB 344 also charges an additional premium on businesses with “excessive claims” in an attempt to encourage employers to prevent benefits from going to workers who do not qualify.

Legislative battles over premiums have become an annual event. The existing approach was thrown “into a political arena in Santa Fe every year,” Cole said. “This bill takes all that drama out and replaces it with a sensible approach based on the solvency of the fund.”
Jobless funding overhaul passesGovernor expected to approve reform

LEGISLATURE 2013
— This article appeared on page B01 of the Albuquerque Journal