July 1 kicks off with a benefits change in new law
Unlike governors and legislatures in 11 states and the Virgin Islands still in hock to the federal government for loans they took out to shore up their unemployment insurance trust funds, Arizona was swift to move on stopping the red ink so that employers, who are the sole contributors to the fund, would not be economically crippled with huge, pandemic-generated increases in UI taxes.
NFIB was at the center of the negotiations with the Arizona Legislature and Gov. Doug Ducey’s office and, in the end, helped craft a compromise among all interested parties that used $759 million in American Rescue Plan Act (ARPA) funds and $62 million from the state general fund to keep the state’s trust fund solvent.
All changes were wrapped into the state budget instead of into legislative bills. As permanent law, it makes the following changes to unemployment insurance taxes and benefits:
- Increases the maximum weekly unemployment insurance benefit from $240 per week to $320 per week, effective July 1, 2022.
- Increases the taxable payroll base from $7,000 to $8,000 on January 1, 2023.
- Decreases the maximum number of weeks of unemployment benefits from 26 weeks to 24 weeks if the state unemployment rate is less than 5% in the prior calendar quarter, effective July 1, 2022.
- Requires DES to obtain current and actual employment and earned income information from third-party sources when it determines eligibility for unemployment benefits. The identity verification process may include digital and/or physical identity authentication factors.
- Requires DES to report by December 31 annually on unemployment insurance fraud for the previous fiscal year.
NFIB had lobbied for a $1 billion deposit but was happy with what small business received, which is an amount calculating how much cash would be needed in the trust fund to keep the average tax rate at the pre-pandemic level.