Kaine proposes using stimulus money for jobless benefits

Likening the nation's economic condition to the Great Depression, Gov. Timothy M. Kaine yesterday proposed a stimulus-backed expansion and extension of unemployment benefits, health insurance and food stamps for out-of-work Virginians.

Kaine also said he would sign the recession-revised two-year, $77 billion budget passed last month by the General Assembly, making only a few revisions. Those are three line-item vetoes that will restore about $3.4 million in cuts made to public broadcasting, fire-safety programs and the state's division of Weights and Measures.

To have Virginia qualify for an additional $125 million of federal-stimulus cash, Kaine proposes allowing laid-off workers to collect an additional 26 weeks of benefits while they are enrolled in training programs. He also is proposing that workers laid off from part-time jobs be allowed to seek part-time work while receiving benefits.

Kaine made his proposals as amendments to related legislation that passed the 2009 General Assembly. Lawmakers will take up the proposed amendments and 103 other gubernatorial revisions to bills passed last month when they reconvene in Richmond on April 8.

"We're dealing with the most significant economic challenge this commonwealth has faced, bluntly, since the 1930s," Kaine said. "It's not [just] data, it's people's lives and people's jobs and people going without. And if we have the ability for the federal government to partner with us to find benefits for these individuals . . . I think we should do it."

Virginia already is slated to receive $62.5 million in stimulus money for unemployment compensation. Another Kaine amendment would extend unemployment benefits for an additional 13 weeks beyond the regular 26-week compensation and 20-week extension in effect.

Kaine said Virginia employers pay the second-lowest annual amount of unemployment taxes in the nation -- about $98 per worker. In the Southeast, the next-lowest unemployment tax burden is in South Carolina, where employers pay an average of $148 per year, per worker. The national average is $258.

But Kaine is expected to face stiff opposition to his unemployment proposals from business groups and conservative lawmakers. They are concerned that employers will be left with an additional unemployment tax burden of $4.50 per worker per year once stimulus funds are exhausted.

Kaine also wants to use stimulus dollars to extend, from three months to nine months, health benefits to workers laid off from small businesses.

The governor said the additional six months of COBRA benefits would come at no cost to employers thanks to stimulus funding. Employers currently contribute two-thirds of the cost of COBRA benefits to former workers; employees contribute one-third.

Another Kaine amendment would require small businesses to provide health insurance to workers without a six-month waiting period. The coverage involves eight basic preventive-care measures, including mammograms and screening for prostate and colorectal cancers.

George C. Peyton Jr., vice president of government relations for the Virginia Retail Federation, said the bill Kaine amended was designed to hold down costs and make health insurance more affordable. It is Senate Bill 1411, sponsored by Sen. John Watkins, R-Powhatan. By inserting the eight mandates, Kaine may make it harder for small-business owners to offer health insurance, Peyton said.

The federation will oppose the amendments in their totality, but it may accept some of the less costly mandates, he said.

Contact Jim Nolan at (804) 649-6061 or .

Staff writer Tyler Whitley contributed to this report.