The National Federation of Independent Business is reacting to news this week that the Michigan Unemployment Agency overpaid more than $3 billion in benefits throughout the pandemic. The NFIB has released the following:
The state’s leading small business organization, the National Federation of Independent Business (NFIB), expressed its disappointment at the information contained in a new report released by the Michigan Auditor General that indicates that the Unemployment Insurance Agency (UIA) made overpayments of almost $4B from March 2020 – August 2021.
“As small businesses struggle to not just recover, but survive from government shut-downs and restrictions, the results of the Auditor General Report are disturbing, to say the least,“ said Amanda Fisher, NFIB Michigan assistant state director.
According to the report, rank and file UIA employees were struggling to deal with the case load in a manner that complied with statute, but leaders in both the Agency and Administration agreed to abandon any measures that would provide accountability and stewardship of the CARES Act and Trust Fund dollars that were improperly paid out. “This revelation, while not surprising given the actions of the Administration in the last 18 months, is a slap in the face to every employer in Michigan,” stated Fisher.
The Unemployment Insurance Trust Fund is funded entirely by employer contributions. Unemployment Insurance payments under the CARES Act were funded with both federal and trust fund dollars. In February of 2020, the Trust Fund balance was more than $4B thanks to actions taken in 2011 to pay off billions of dollars of debt. However, with the Trust Fund depleted, in part because of the egregious actions taken by the UIA, Michigan’s unemployment system is now unprepared for any kind of economic downturn.
“Between the draconian policies of business shut-downs, the overpayments made by the UIA, and the unwillingness of the Governor to sign any bills that would actually help small businesses who were directly affected by these policies, Michigan’s small employers are in a precarious position,” continued Fisher. “Any economic downturn could deplete the Trust Fund in a matter of weeks, causing a chain reaction of higher employment taxes, fewer jobs, and less tax revenues. This is why we are calling on the Governor to redress the situation and use federal recovery money to make a deposit of $1B into the UI Trust Fund without any strings attached.”
