LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SCR 5 SLS 202ES 43
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: October 22, 2020 7:29 AM Author: REESE
Dept./Agy.: Workforce Commission
Subject: Unemployment Analyst: Tanesha Morgan
EMPLOYMENT EN SEE FISC NOTE SD See Note Page 1 of 1
Suspends certain provisions of law relative to unemployment tax increases and benefit reductions. (Items #8 and #30).
Suspends the provisions of R.S. 23:1474(C) and (G)(3), and (H). Effective through the 60th day following the 2021 Regular
Legislative Session.
R.S. 23:1474(C): requirement that LWC shall apply a maximum UI taxable wage base, maximum weekly
unemployment benefit amount, and a UI benefit calculation formula in accordance with the official projection of the UI Trust
Fund adopted by REC;
R.S. 23:1474(G)(3): requirement that LWC shall determine the comparative balance and the applied trust fund
balance for the UI Trust Fund; and
R.S. 23:1474(H): requirement that REC shall adopt an official projection for the UI Trust Fund balance for
September 1, 2021.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other SEE BELOW SEE BELOW $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other SEE BELOW SEE BELOW $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0
EXPENDITURE EXPLANATION
The fiscal note discussion assumes that suspension of the referenced statutes intends to keep the current benefit amounts
and taxable wage base in place. Based on present law, if the applied trust fund balance range is below $750 M, then the
benefit formula changes and maximum weekly benefit amount falls from $247 to $221. Based on testimony from LWC
before REC, it is anticipated that under present law the applied trust fund balance range for 2021 would be less than $750 M
and trigger the lower maximum weekly benefit amount and formula for calculation of benefits. Thus, under present law, per
recipient benefit disbursements, from the trust fund would decline in the second half of FY 21 and first half of FY 22 (2021
calendar year).
The effect of the proposed resolution is assumed to be that the unemployment benefit calculation formula for a
recipient and the maximum weekly unemployment benefit amount applied in calendar year 2020 shall remain the same for
the calendar year beginning Jan. 1, 2021. Thus, under proposed law per recipient benefit disbursements from the trust fund
would not decline in the second half of FY 21 and first half of FY 22 (2021 calendar year).
It should be noted that the unemployment trust fund is not an appropriated fund within the state budget, but is held by the
U.S. Treasury in the federal Unemployment Insurance trust fund, where each state has a separate account for covering
normal unemployment insurance benefits.
REVENUE EXPLANATION
The fiscal note discussion assumes that suspension of the referenced statutes intends to keep the current benefit amounts
and taxable wage base in place. Based on present law, if the applied trust fund balance range is below $750 M, then the
taxable wage base increases from $7,700 to $8,500. Based on testimony from LWC before REC, it is anticipated that under
present law the applied trust fund balance range for 2021 would be less than $750 M and trigger the higher taxable wage
base. For illustrative purposes, employers paid $205.5 M in UI taxes in 2019 when the wage base was $7,700. If the wage
base had been $8,500 in 2019, employers would have paid at most an estimated $226.8 M in UI taxes, which is an increase
of $21.3 M.
The effect of the proposed resolution is assumed to be that the taxable wage base in calendar year 2020 ($7,700)
shall remain the same for the calendar year beginning Jan. 1, 2021. Present law defines the “taxable wage base” as the
portion of wages paid by an employer to an employee in a given calendar year upon which the employer shall be liable to
pay state UI taxes. Thus, per employer unemployment tax payments and receipts of the trust fund will not change in the
second half of FY 21 and first half of FY 22 (2021 calendar year), as a result of a taxable wage base change.
It should be noted that the unemployment trust fund is not an appropriated fund within the state budget, but is held
by the U.S. Treasury in the federal Unemployment Insurance trust fund, where each state has a separate account for
covering normal unemployment insurance benefits.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Alan M. Boxberger
x 13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director