SB 159-UNEMPLOYMENT BENEFITS  2:45:47 PM CHAIR COSTELLO announced the consideration of SENATE BILL NO. 159, "An Act relating to unemployment benefits." She stated that this is the second hearing and version I is before the committee. She asked Ms. Wilterdink to refresh the committee's recall of SB 159 before she opened public testimony. 2:46:14 PM MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State Legislature, Juneau, Alaska, stated that SB 159 will index the duration of unemployment benefits Alaskan claimants may receive to the unemployment rate. When there are more jobs, the unemployment rate will be lower so fewer weeks of benefits will be available. The reverse applies when there are few jobs available. CHAIR COSTELLO asked for an explanation of what the section on seasonal workers accomplishes. MS. WILTERDINK explained that the current system gives fewer weeks of unemployment benefits to seasonal workers who have inconsistent income throughout the year compared to workers whose income is stable throughout the year. SB 159 says seasonal workers who pay into the system deserve the same duration of benefits as somebody who works year round and pays into the system. 2:48:04 PM CHAIR COSTELLO opened public testimony on SB 159. 2:48:23 PM JEFF GARNESS, representing self, Anchorage, Alaska, stated that as a long time private business owner he was speaking in support of SB 159. He read the following testimony. As the primary payers of the unemployment system, business owners like me have a vested interest in seeking that the program is an effective safety net that carries workers from one job to the next. But over the past years, pandemic related pressures weighed heavily on the unemployment system exacerbating and exposing some of the unemployment program's flaws and weaknesses and ultimately decreasing the program's solvency. Both employers and workers deserve reforms to the unemployment system that shore up the program for the long term. We all want the unemployment program to exist for hard working Alaskans who need a helping hand between jobs and Senate Bill 159 contains several proposals to accomplish that very goal. Alaska's current unemployment system doesn't account for the availability of jobs when determining the duration of benefits. Senate Bill 159 would tie the actual job market to the duration of benefits thus treating all Alaskans more fairly, even if they work a seasonal job. The indexing of unemployment insurance benefits to the current state unemployment rate would ensure individuals receive the support they need when jobs are scarce, but also giving individuals the push they may need to get back to work when the jobs are plentiful. Employers should not be forced to compete with the unemployment insurance program when jobs are available, nor should adults be encouraged to forego work and trade their independence. This bill also requires checking suspicious activity such as multiple filings for benefits through the same IP address. These simple reforms would target fraudsters and help maintain benefits for those who truly need them. I encourage you to pass Senate Bill 159 to help Alaskans get started on ensuring our state's unemployment system is poised for success in the future. 2:50:46 PM ROY SYREN, representing self, Anchorage, Alaska, stated support for SB 159 as the owner of a small construction business that employs people seasonally and year round. There is a limited window to accomplish this work in Alaska. His business ramps up employment during construction months and typically lays off 50 percent of these workers in late fall. He related that it was a challenge in 2021 to fill these jobs even when no experience was required. Many of the few applicants did not follow through to an interview. He said it is important for businesses such as his to have a pool of employees from which to draw, so he was encouraged when SB 159 was introduced. It will improve the employment market in the state by putting potential workers into the market at just the right time. This will help businesses like his do more business and contribute positively to the Alaskan economy. 2:52:59 PM BETHANY MARCUM, Chief Executive Officer, Alaska Policy Forum, Anchorage, Alaska, read her testimony in support of SB 159: Alaska's economic recovery from the pandemic has not been strong. We have not yet recovered the jobs lost and unemployment trust funds have been greatly reduced. Too many Alaskans have not returned to the labor force and by not fully replenishing the funds in our trust, we are putting our economy at risk in the event of future crises. Other states such as Idaho, North Carolina, Alabama, Florida, and Tennessee have policies in place that promote a healthier economy. Those states link unemployment benefits to economic conditions. In those states, when economic conditions are such that there are not many job openings, workers receive payments for longer periods of time. And when employers are hiring and many jobs are available, benefits are provided for a shorter duration. It's a policy that helps in multiple ways. First, it helps by restoring the funds in our trust so that we can continue to support those who have lost jobs during difficult times. Second, it helps individuals get the support they need and return to the workforce when jobs do exist. Third, it helps to create a market as workers for employers who are trying to hire as they maintain or expand their businesses. The data from those states which have implemented this policy is strong and compelling. They have continued recovering jobs post-pandemic at a much higher rate than Alaska. Their residents have returned to the workforce and now their state trust fund balances are on the right trajectory. The data also shows that people who are out of the job market for longer periods of time are less likely to return to work. Thus our policies should encourage workers to return as soon as the economy supports the jobs. As elected officials, you have the power to pass policies that will put our economy on the right path. I encourage you to take a look at policies that exist that will reduce Alaska's labor shortage and improve our economy. 2:55:06 PM CHAIR COSTELLO discerned nobody else wished to comment and she closed public testimony on SB 159. She noted who were available to answer questions and asked Brian Sikma what his experience was with bills such as SB 159 that index the duration of benefits to the unemployment rate. 2:55:48 PM BRIAN SIKMA, Visiting Fellow, Opportunity Solutions Project, Wisconsin, stated his organization has worked in a number of states that either already have or plan to implement this type of indexing reform. There are numerous benefits to labor markets, responsiveness to job openings, and trust fund stability. Calculations he and his colleagues have run indicate that Alaska's unemployment insurance trust fund would grow by about $96 million per year which would make a significant difference in the solvency of the fund without raising taxes on employers or employees. MR. SIKMA offered his professional opinion that many states are looking at this type of legislation to refill their trust funds without having to raise taxes. Large workforce shortages are also a factor. The US Department of Labor data shows that Alaska had more job openings, seasonally adjusted per capita, than any other state in the union. Based on the experience of other states that have enacted similar legislation, Alaska will likely see workers return to work much more quickly if this legislation passes. MR. SIKMA described SB 159 as a multiple solution to incentivizing people to return to work. 2:58:30 PM SENATOR STEVENS asked for a simple explanation of indexing reform and how it works. MR. SIKMA explained that indexing bases the duration of unemployment benefits on the unemployment rate that is measured with federal data. For every half percentage point that the unemployment rate rises, an additional week of benefits is added, up to a cap. SB 159 establishes a floor such that the minimum duration of benefits would be 12 weeks if the employment rate is below seven percent and up to 20 weeks if the unemployment rate is 10.51 percent or higher. CHAIR COSTELLO asked Clifford Napier how the Division of Employment and Training Services overlaps with the Unemployment Insurance Benefit Program. 3:00:15 PM CLIFFORD NAPIER, Assistant Director, Unemployment Insurance, Division of Employment and Training Services, Department of Labor and Workforce Development (DOLWD), Anchorage, Alaska, explained that individuals who are collecting unemployment are required to search for work and report those efforts. Unemployed workers are registered with the job centers and they are required to go through a reemployment assessment process that looks at ways the individual could become better ready for the labor market. This might include a referral for training or simply improving the individual's resume. 3:01:32 PM At ease 3:01:43 PM CHAIR COSTELLO reconvened the meeting and solicited a motion. 3:01:52 PM SENATOR STEVENS moved to report the CS for SB 159, work order 32-LS1313\I, from committee with individual recommendations and attached fiscal note(s). 3:02:14 PM CHAIR COSTELLO found no objection and CSSB 159(L&C) was reported from the Senate Labor and Commerce Standing Committee.