S-4130.1                   _______________________________________________

                                            SENATE JOINT MEMORIAL 8027

                              _______________________________________________

State of Washington                              53rd Legislature                             1994 Regular Session

By Senators Vognild, Newhouse, Moore, Amondson, Prentice, Sutherland, McAuliffe and Fraser

Read first time 01/17/94.  Referred to Committee on Labor & Commerce.

Requesting that Congress help states with employment security system funding.

          TO THE HONORABLE BILL CLINTON, PRESIDENT OF THE UNITED STATES, AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED, AND TO THE UNITED STATES DEPARTMENT OF LABOR:

          We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:

          WHEREAS, Numerous challenges face the nation as the labor force and opportunities in the workplace change.  Among states, differing circumstances reflect changing economic bases, unique demographic trends, and limitations on resources availability.  States must have the flexibility and authority to design and implement economic development programs that address state-specific situations.  Employment security must figure prominently in these efforts; and

          WHEREAS, Changes in the current system of financing the operational costs of the employment security system are necessary to provide an effective national employment security system that will be able to address the ongoing challenge to remain competitive.  Employment security agencies and personnel must not only provide economic assistance to those who find themselves unemployed through no fault of their own, but also have the financial and human resources to put these unemployed Americans back to work; and

          WHEREAS, Under the framework of the system outlined in the Federal Unemployment Tax Act (FUTA), state revenues finance unemployment benefits while the federal government collects a payroll tax, levied upon employers, which provides funds dedicated solely to the administration of both the federal and the state systems.  The amount now being collected is more than adequate to fund the various state systems, but the amount returned to the states has been shrinking because these funds are included in the federal unified budget and therefore are subject to the domestic discretionary spending caps as required by the Balanced Budget and Emergency Deficit Control Act of 1985; and

          WHEREAS, For the past eight years, state employment security administrators have watched the decline in funding for employment security services that resulted from federal budget deficit considerations while balances in the Unemployment Trust Fund's Employment Security Administration Account grew by leaps and bounds, only serving to mask the size of the federal deficit; and

          WHEREAS, In the last five years the average yearly balance of the Employment Security Administration Account was $1.68 billion, in 1993 the projected balance is $1.93 billion, and in 1994 the projection is for $1.96 billion; and

          WHEREAS, In the recent recession, state employment security agencies could have moved more quickly to put unemployed Americans back to work if the agencies were being adequately funded from the Employment Security Administration Account;

          NOW, THEREFORE, Your Memorialists respectfully pray that Congress:

          (1) Remove the dedicated FUTA trust fund money from the federal unified budget;

          (2) Exclude from the calculation of the federal budget deficit balances in the Unemployment Trust Fund financed from dedicated revenues;

          (3) Make decisions about spending for extended unemployment benefits and administration of employment and unemployment programs on their merits and not federal budget deficit reduction rules; and

          (4) Provide states with the flexibility to meet the needs of unemployed Americans, particularly through better coordination between the various employment and training programs and by having the ability to respond early to situations that may be unique to their state.

          BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable Bill Clinton, President of the United States, the United States Department of Labor, the President of the United States Senate, the Speaker of the House of Representatives, and each member of Congress from the State of Washington.

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