House votes to raise Arizona’s low unemployment pay

An unemployment application form.

The Arizona House voted Wednesday to raise Arizona’s super-low $240 maximum weekly unemployment benefit to $300 at the start of 2022 and impose a small increase in employer insurance premiums to pay for the increase.

The proposal from Republican Rep. David Cook, HB2805, passed on a 50-9 vote and now goes to the Senate, which is considering a different proposal backed by GOP President Karen Fann.

Fann’s proposal appears to have bipartisan support in the Senate and increases the weekly unemployment pay to $320 by midsummer of this year. But it also cuts the number of weeks a person is eligible to 20 from 26 when the state unemployment rate is below 6%.

Both measures will allow laid-off workers to take more part-time work without losing their benefits. Arizona currently allows workers to earn only $30 a week before benefits are reduced. That amount would rise to $160 under both proposals.

RELATED: New bill would allow thousands more Arizonans to claim unemployment benefits

Cook has questioned how Fann can raise weekly pay more while still paying for the proposal. He made that point when thanking House members for backing his plan Wednesday and questioning the nine members who voted against his measure.

"If you don’t like this, you sure won’t like what’s coming our way from the other building, as a conservative," Cook said. "This is common sense, it’s paid for. This is something that helps people and small businesses."

Employers who currently pay premiums on the first $7,000 of yearly wages would see that increased to $8,000 in January under both proposals.

Fann’s plan would give an additional raise to $400 a week once the state’s depleted unemployment trust fund is back at normal levels and tax the first $9,000 in wages starting in January 2023.

According to estimates from the Department of Economic Security, average yearly per-employee premiums paid by employers would go from $160 a year to $182 a year. Under Fann’s plan, it would then go to $205 a year in 2023

Arizona’s unemployment soared after layoffs triggered by the pandemic in March. The trust fund, which builds up cash during periods of low unemployment, was at $1.1 billion before the pandemic hit a year ago.

This week, it is below $90 million, although Republican Gov. Doug Ducey plans to use $134 million in federal virus relief funds to boost that balance.

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