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The PA Chamber applauds the House Labor and Industry Committee for advancing Senate Bill 1310, which would begin to address Pennsylvania’s nearly $4 billion debt to the federal government as a result of borrowing needed to pay state unemployment compensation benefits.

While due in part to the recession and resulting high unemployment, the UC Trust Fund’s insolvency was also caused by liberal benefit requirements that allowed far too many people access to a system meant for individuals who lose their job through no fault of their own.

Earlier this year, the PA Chamber supported the passage of Act 6 because it stabilized the fast-paced growth of the fund, clarified definitions and tightened claimant requirements. However, the law did not address the debt to the federal government or long-term solvency concerns plaguing the UC Trust Fund.

Although Senate Bill 1310 does not offer a permanent solvency solution, it would allow the Pennsylvania Economic Development Financing Authority to issue bonds in an amount that would pay off the federal debt in full and improve UC Trust Fund’s cash flow.

Additionally, it would establish a temporary amnesty program that would permit delinquent businesses to waive 50 percent of their interest payments if they pay the principal debt in full; and would authorize the Department of Labor and Industry to target businesses evading UC taxes and recoup illegitimate overpayments to claimants. These and other provisions would increase annual revenue to the fund by $32 million.

All told, Senate Bill 1310 would save Pennsylvania businesses between $160 million and $256 million.

Prior to the committee vote, the PA Chamber issued a memo to lawmakers reminding them that while significant changes to the state’s UC system still are needed to ensure sustainability, S.B. 1310 would prevent Pennsylvania’s UC Trust Fund debt from continuing to grow at a detrimental pace.

PA Chamber members are now urging the full House to act on the measure, so that it might reach the desk of Gov. Tom Corbett before the end of the year.  

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Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business.