State lawmakers plan to funnel $7.2 billion to Texas unemployment insurance fund

Texas Politics

AUSTIN (Nexstar) — One of the nearly 200 bills headed to the governor’s desk at the end of this special session, Senate Bill 8 lays out how Texas will spend $16 billion in federal COVID-19 relief. More than $7.2 billion will go to the state’s unemployment insurance fund.

But that won’t solve all of the issues that resulted from a record number of Texans applying for unemployment benefits through the Texas Workforce Commission during the pandemic.

“I’m over here worried about like how I’m going to keep the lights on, you know,” Steve Smith said. He’s been trying to get a hold of someone at the TWC for months.

“I got somebody who said, ‘Okay, I’ve put in a ticket, somebody should be contacting you.’ It took them like a month and a half to finally call me, and I missed the phone call,” Smith said.

The TWC processed 948% more unemployment claims in 2020 compared to 2019.

“We saw about eight years worth of unemployment insurance claims; there’s really no precedent for that kind of level of claims,” James Bernsen with the TWC explained.

To respond to the massive spike, the TWC added contract call centers and revamped its website.

But the $7.2 billion won’t be going toward extra permanent staff. It’s acting as a bandage.

“It, first of all, replenishes that money that we borrowed from the federal government, pays that loan back. And it also gets us back to the stable level — the floor of money that we’re required by the law to have,” Bernsen explained.

He said if they didn’t do this, the state would have to tax businesses more to replenish the fund.

Lawmakers say this is just a starting point.

“We need to make sure that we do keep the Texas Workforce Commission adequately staffed, because the initial problem that we had was that many people weren’t able to get through to the Workforce Commission. They were woefully understaffed,” State Rep. Ron Reynolds (D-Missouri City) said, explaining that could be a goal for lawmakers next regular session.

Reynolds said he also hopes lawmakers consider raising the minimum wage to help with the problem long term.

“Texas, too, has the bottom base of the minimum wage is $7.25, where most states and many companies have raised it to $15 an hour. So there were a lot of people that were at the flatline that it was they were making more by staying at home, right. And people were complaining about a workforce shortage, because they made more and unemployment benefits, and they may go on a job,” Reynolds added.

For now, the TWC is still analyzing its COVID-19 response, and the agency said it should be fine with this extra funding for the time being, barring another financial disaster.

“We’re looking at all the lessons learned from COVID-19. We haven’t shut down the call centers, the extra contractors — we still have them in place. And we’re going to continue to assess the necessity of that.”

The governor still needs to sign the bill before the money is funneled out.

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