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Political battle leaves Michigan families wondering if they will receive unemployment benefits

WXYZ looks into solvency of the unemployment fund
Unemployment Benefits
Posted at 9:55 PM, Jan 01, 2021

LANSING, Mich. (WXYZ) — Samka Keranovic says she is lucky, she is still working. At the same time, she is hoping unemployment will help her husband stay home to help their children stay focused on virtual learning.

“Their grades would drastically change if he were to leave and go to work, so he is home making sure that doesn’t happen,” said Keranovic.

Many Michiganders are wondering whether their benefits will continue.

Before the pandemic, Michigan workers could get 20 weeks of unemployment benefits.

Governor Gretchen Whitmer (D-Michigan) signed a bill to keep a 26-week extension in place through March, however in the bill is a clause.

It requires the governor to approve spending $220 million tax dollars on the Unemployment Insurance Trust Fund, which collects money from businesses for unemployment insurance.

Republican lawmakers call it help for businesses. The governor vetoed it calling it a corporate tax cut.

“The extension of benefits to hard-working Michiganders should not be used as any sort of a bargaining chip or tied to priorities that the legislature might have outside of protecting public health and the economy,” said Gov. Whitmer.

“It is important to fund the six more weeks of unemployment with the $220 million dollars because without the $220 million the fund will be almost insolvent,” said State Representative Joe Bellino (R-Monroe County).

How needed are your tax dollars to support the fund at this time?

7 Action News obtained numbers from the state unemployment agency. While many states are already insolvent and have borrowed money from the federal government, Michigan has $732 million available for UI Benefits as of this week.

The solvency of the fund is dependent on tax collections and claims.

If the current unemployment levels continue, the fund is projected to have enough money to cover benefits through the fall. If it becomes insolvent, employers could be charged more to pay for interest on federal loans.

Right now the government has offered zero percent interest rates to help in the crisis.

As a result, at this time, it is not clear how much the fund needs $220 million in tax dollars. It is possible the federal government will continue offering 0% interest rates to help avoid charges to businesses.

The CEO of the Detroit Regional Chamber says businesses should not be on the hook if it runs out of money.

“Businesses have been asked to and have been doing very much the right things throughout this pandemic for as many people as they possibly can. And now the government coming back and saying we have put all these people on unemployment, we used up the trust fund, here is the bill. We think this is a societal bill and society needs to pay, not just businesses,” said Sandy Baruah, Detroit Regional Chamber CEO.

It is possible the governor and legislature will work on a compromise. Many families hope they all remember, this is not a typical situation, especially when it comes to children trying to learn.

“I just hope that they look at people first and make sure the kids don’t suffer,” said Keranovic.