AJR24: Joint Resolution Text

LRB-1676/2

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1999 - 2000 LEGISLATURE

1999 Assembly JOINT RESOLUTION 24

February 25, 1999 - Introduced by Representatives Vrakas, Musser, Duff, Ladwig, F. Lasee, Goetsch, Jensen, Owens, Kedzie, Sykora, Stone, Grothman, Seratti, Petrowski, Gunderson and Montgomery, cosponsored by Senators Fitzgerald, Huelsman and Darling. Referred to Committee on Rules.

AJR24,1,2 Relating to: urging Congress to enact legislation to reform the employment security system.

AJR24,1,6 Whereas, the employment security (ES) system was created to help reduce the economic hardship of unemployed workers by temporarily providing for the partial replacement of lost income, promoting reemployment, preventing unemployment and stabilizing the economy during recessions; and

AJR24,1,8 Whereas, the ES system consists of unemployment insurance (UI), labor exchange services and labor market information services; and

AJR24,1,12 Whereas, as now structured, employers must pay 2 separate payroll taxes to support the ES system, a federal tax under the Federal Unemployment Tax Act (FUTA) to finance program administrative expenses, and a state UI tax to pay for actual UI benefits; and

AJR24,2,2 Whereas, all state UI and FUTA tax revenue collected through the ES system is maintained by the federal government, in 53 separate accounts for each state's UI taxes (federal law defines the District of Columbia, Puerto Rico and the Virgin Islands as "states" for the purposes of UI), and 3 separate federal accounts for the FUTA tax; and

AJR24,2,6 Whereas, FUTA tax moneys are returned to the states in the form of federal categorical grants for program administration that, in nearly all states, are significantly less than the amounts collected in FUTA revenue from each state's employers; and

AJR24,2,9 Whereas, in federal fiscal year 1995, employers in 45 states (including Wisconsin) and the District of Columbia paid more in FUTA taxes than their states and the district got back in federal grants; and

AJR24,2,12 Whereas, in federal fiscal year 1996, only around 60% of FUTA revenue received by the federal government was appropriated for state program administration; and

AJR24,2,14 Whereas, for federal fiscal year 1997, Wisconsin paid $131.9 million in FUTA taxes and got back only $66.3 million in federal grants; and

AJR24,2,17 Whereas, as a condition of receiving grants for program administration, states are subject to numerous federal regulations, mandates and directives that impede efficient program management; and

AJR24,2,19 Whereas, the accounts being maintained by the federal government have accumulated large surpluses that are being used to offset the federal deficit; and

AJR24,2,21 Whereas, at the end of federal fiscal year 1996, the 3 federal accounts had balances totaling $15.3 billion; and

AJR24,2,25 Whereas, congressional appropriations for ES program administration continue to decline despite these large surpluses in the UI dedicated federal accounts, and Congress has repeatedly extended a temporary FUTA surtax that has generated increasingly larger balances in these federal trust funds; and

AJR24,3,3 Whereas, a system can be established to support funding levels for states that currently receive more in federal grants than their employers pay in FUTA taxes; and

AJR24,3,6 Whereas, insufficient administrative funding may cause a decline in employment services, resulting in a delay in claimants' return to work and, consequently, a possible rise in state UI taxes; and

AJR24,3,11 Whereas, permitting control by the states of the money in their federal accounts would allow states to receive back the vast majority of the amounts paid by their employers, and retaining the federal accounts while giving states the control of the money they contribute to these accounts would allow the accounts to continue to offset the federal deficit; and

AJR24,3,18 Whereas, state responsibility for the administration and funding of the ES system would cut the paperwork burden on employers by eliminating the need to file 2 separate tax forms, would decrease costs of administration by eliminating the "middle person" role of the Internal Revenue Service in collection of FUTA taxes, would drastically decrease federal program regulation and permit states to design programs tailored to the needs of their individual state work forces and employers, and would significantly reduce federal bureaucracies; now, therefore, be it

AJR24,3,24 Resolved by the assembly, the senate concurring, That the Wisconsin legislature hereby respectfully urges the Congress of the United States to let the FUTA surtax expire, transfer much of the administration and financing of the ES system to the states while retaining funds in the unified federal budget, and retain the federal government's role of ensuring nationwide application of a minimum number of fundamental standards; and, be if further

AJR24,4,2 Resolved, That the assembly chief clerk shall provide a copy of this joint resolution to all members of Congress.

AJR24,4,3 (End)