BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1291 (Evans) - Unemployment benefits: training: teacher
credentialing.
Amended: April 30, 2012 Policy Vote: L&IR 4-0
Urgency: No Mandate: No
Hearing Date: May 7, 2012 Consultant: Bob Franzoia
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1291 would delete the January 1, 2015, sunset
date, of the California Training Benefits Program, thereby
extending the program indefinitely.
Fiscal Impact: Minor to major annual cost to Unemployment Fund
depending on claimant participation in the program.
A 26 week training extension would be available to eligible
participants with teachers likely to qualify for the maximum
unemployment insurance benefit amount of $450 based on their
reported earnings.
Per participant cost of up to $11,700.
For 100 participants annual cost of $1,170,000; for 1,000
participants annual cost of $11.7 million.
Background: Unemployment insurance is a federal-state program
that provides weekly payments to eligible persons who lose their
jobs through no fault of their own. The program is financed by
employers who pay unemployment taxes on the first $7,000 in
wages paid to each employee in a calendar year. The benefits
range from $40 to $450 per week depending upon earnings during a
12 month base period.
The Employment Development Department (department) released an
updated Unemployment Fund forecast in October 2011 summarizing
and projecting the status of fund solvency. California's fund
is currently $10.2 billion in the red and is forecasted to end
2012 with a deficit of $10.7 billion if nothing is done to
legislatively revise the revenue generation model. The deficit
is still growing but not as large or as fast as forecasted in
May 2011 mainly due to the fact that demand for unemployment
benefits is finally starting to level off a bit, and there was
an offset caused by the addition of almost $839 million in
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American Recovery and Reinvestment Act funds.
While regular UI benefit amounts are significantly decreasing
since the peak of the
recession, even if and when the disbursement levels reach
pre-recessionary levels, the
current financing system cannot self-correct during better
economic times because of the significant deficit owed and the
outdated financing structure. The department provides an annual
updated May Unemployment Fund Forecast.
Proposed Law: This bill would require a determination of
automatic eligibility for benefits under the program to be
issued to an unemployed teacher who is otherwise eligible for
unemployment benefits, if the department finds that the
unemployed teacher is a permanent or probationary teacher who
participates in a Commission on Teacher Credentialing credential
preparation or training program for additional certification in
math, science, or special education, and was laid off.
Because this bill would extend the operation of the program and
make changes to existing eligibility requirements for training
and retraining benefits, which would result in additional
amounts being payable from the Unemployment Fund for those
benefits, the bill would make an appropriation.
Staff Comments: The number of teachers laid off within the last
three years who may seek an additional credential is unknown.
Per participant benefit costs could vary widely depending on
employment, qualifications and trainings.
School districts, as employers, participate in the School
Employees Fund (SEF), a joint pooled-risk fund administered by
the department, which collects contributions based upon a
percentage of total wages paid by public schools and community
college districts. Money deposited in the SEF is used to
reimburse the Unemployment Fund for the cost of benefits paid to
former employees of those school employers who have elected this
option in lieu of paying the tax-rated method, as is required of
private sector employers. Since 1972, this method of financing
has been used by 99 percent of the school employers.
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All school employers participating in the SEF have the same
Unemployment Fund contribution rate. The rate is based on costs
incurred by all SEF participants and the SEF balance on December
31 of the applicable year. For 2012-13, the rate is 1.10
percent. The rate for 2011-12 was 1.61 percent.
Related Legislation: AB 2058 (Block) Chapter 591/2010 revised
the requirements of the California Training Benefits Program to
allow unemployed persons to receive unemployment insurance
benefits while enrolled in a training program full time.
Recommended Amendments: In order to maintain legislative
oversight, staff recommends this bill be amended to extend the
sunset five years beginning January 1, 2014.