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$250M In Federal Funds Moved To UI Trust Fund Under Bill

February 1, 2022

Michigan would kick $250 million into the Unemployment Insurance Trust Fund as a way to make sure businesses aren’t paying for reported fraud coming out of the unemployment agency during the COVID-19 pandemic.

HB 5525 passed out of the House Appropriations Committee with the enthusiastic support of the various business groups and then passed on the House floor, 101-1, with only Rep. Steve Carra (R-Three Rivers) voting no.

House Appropriations Committee Chair Thomas Albert (R-Lowell) noted that businesses pay into the trust fund. Between “shutdown orders” or “runaway inflation,” they should not be on the hook for the state’s portion of the $8.5 billion in fraud found within the Unemployment Insurance Agency (UIA).

“The least we can do to help our businesses get back on their feet is make sure they aren’t asked to pay for the massive fraud allowed by the UIA,” he said.

The Michigan Chamber of Commerce, the Small Business Association of Michigan and the National Federation of Independent Businesses testified in support of HB 5525.

Albert said the latest estimates he’s seen has the trust fund at $950 million, 80% below where it was before the pandemic.

Rep. Terry Sabo (D-Muskegon) tried to increase the maximum weekly benefit for recipients and increase the per-child benefit. 

Rep. Amos Oneal (D-Saginaw) tried to set aside UIA $100 million to upgrade its computer systems and hire more employees to address a history of “underfunding” within the department. Both amendments failed on a party-line vote in committee.

The House Appropriations Committee also moved out legislation designed to dole out more grants from a more than $150 million pie for businesses impacted by the COVID-driven economic shutdowns.

Owners of bars, restaurants and gyms were among those who told the committee about how they were forced to pay for licenses in 2020 and part of 2021, but were not able to operate.

“This is about righting that wrong,” Albert said.

The bill moved out of committee 27-1, but didn’t advance on the House floor. Neither bill is the product of negotiation with the Senate or the Governor’s office. 

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