Jackson Free Press

Gov. Haley Barbour and House Democrats are blaming each other for the Legislature's failure to re-authorize the Mississippi Department of Employment Security, an agency that provides workforce services and dispenses unemployment benefits.

Barbour said in a March 10 statement that House Democrats endangered thousands of unemployed Mississippians by refusing to pass a Senate bill re-authorizing the MDES before the Wednesday deadline.

"By refusing to bring up Senate Bill 2404 for a vote, House leaders have jeopardized the continued payments of unemployment benefits and put Mississippi at risk of being noncompliant with a multitude of federal guidelines, which will necessarily result in higher taxes," Barbour wrote. "Some people may be in favor of raising taxes on businesses--some $400 million--if MDES is not reauthorized, but I'm not one of them. Clearly, in these economic times, the last thing Mississippi should do is increase taxes on the very people who create jobs: our employers."

House Labor Committee Chairman Rufus Straughter, D-Belzoni, refused to let the Senate bill out of his committee, arguing that the bill fails to allow the state access to $56.1 million in federal stimulus money that would support small businesses and 40,000 Mississippi families struggling through the 2010 recession. Individual states have their own standards eligibility requirements for unemployment benefits, but under the stimulus bill approved last year, the federal government offers $7 billion to states that expand coverage to certain categories of workers, including part-timer workers and people in training programs.

Both Barbour and Democrats argue that state law requires MDES, which is responsible for administering the state's unemployment insurance program, to be reauthorized every two years.  If the legislature fails to authorize MDES the U.S. Department of Labor will step in and take over the collection of unemployment taxes from Mississippi businesses. Straughter said that if the Department of Labor takes over MDES, taxes on businesses will increase to 6.2 percent per employee, resulting in a $413 million tax bill for Mississippi businesses.  

The House submitted its own bill reauthorizing MDES, which allowed the state to make use of $56.1 million in federal stimulus money by following requirements authorized in the federal stimulus act to allow part-time employees to qualify for Unemployment Insurance.

"The bill required a 3/5 vote, but it only got about 65 votes on it," Straughter said.

Barbour is among the group of Republican governors rejecting their states' share of the $7 billion in stimulus money for enhanced unemployment benefits, saying the strings Congress attached would lead to higher business taxes. To get the money, states must expand unemployment benefits to cover part-time workers who lose their jobs.

he governor said last year that he did not want the stimulus money because Mississippi would have to raise taxes on businesses or cut back on benefits once the federal funding runs out.