From today's Houston Chronicle:

[link|http://www.chron.com/cs/CDA/story.hts/metropolitan/1293388|story]

Texas is given low marks in unemployment benefits
By MICHAEL PETROCELLI
Copyright 2002 Houston Chronicle Washington Bureau

WASHINGTON -- Unemployed workers in Texas are among the least likely in the nation to receive unemployment insurance payments, according to a report released Tuesday.

Only 29.8 percent of Texas workers who filed unemployment insurance claims in 2001 received benefits, compared with 43.3 percent nationally, according to the Economic Policy Institute, a pro-labor research organization.

Maurice Emsellem, one of the report's authors, said that Texas' problems with unemployment insurance place it near the bottom of the 23 states that received overall failing grades.

"If it's not the worst, it's very close," he said.

Texas' situation is compounded by the fact that its unemployment insurance system is one of the most cash-strapped in the nation, according to the report.

While most states built up a significant surplus in unemployment insurance funds during the economic boom of the 1990s, according to the report, Texas did not.

The report based its assessment of the solvency of a trust fund by calculating how long it could continue to pay out benefits if tax revenues were completely cut off. At the end of 2001, Texas' fund had enough to pay benefits for less than two months, second lowest to New York.

The report rated New Mexico's fund most solvent, as it had enough in reserve to pay benefits for 32 months.

The Texas Workforce Commission in January projected a $1.6 billion unemployment tax increase in 2003 to cover rising unemployment insurance claims.

Gov. Rick Perry said in January that the system was working exactly as it should. Under Texas law, an increase in the unemployment tax paid by corporations is automatically triggered when the fund dips below 1 percent of the state's taxable wages.

Texas' unemployment rate in January was 5.7 percent, according to the Workforce Commission.

The Economic Policy Institute report graded states' unemployment insurance systems on five criteria: eligibility for benefits, benefit adequacy, employer taxation, trust fund solvency, and recession preparedness. Texas was one of eight states to receive a failing grade in four out of the five categories.

According to the report, Texas' rate of granting benefits to 29.8 percent of applicants was the 10th lowest in 2001. Connecticut's rate was the highest at 73.9 percent.

The report's authors argue that a major reason Texas grants benefits to such a low percentage of applicants is that the Depression-era laws governing who is eligible have not been changed to keep up with a changing economy.

"This system was built when there was a stable, rooted workforce, and that's no longer the case," said Rick Levy, legal director for the Texas AFL-CIO.

Part-time workers, often women with children at home, are not eligible for unemployment insurance in most states, including Texas, unless they are looking for a full-time job, Levy said.

Workers who are laid off after spending only a short time in the workforce also suffer under the current system, according to the report.

In Texas, and 39 other states, wages earned in the three months just before a worker is laid off are not counted when benefits are calculated. This means that a worker who loses his or her job after less than three months is not eligible for benefits, and those who have worked for less than 15 months receive reduced benefits, Levy said.