House members bash payback request after unemployment overpay

(Mike Lear, Mo. House Communications) House members from both parties are not happy that Missourians are being asked to pay back unemployment assistance they received in error through no fault of their own.

Department of Labor Director Anna Hui told the Special Committee on Government Oversight overpayments are “kind of built into” the unemployment system.  The Department is expected to make an eligibility determination and get a payment out to an applicant within 14 days, generally based solely on information provided by the applicant.  As additional information comes in, often from the applicant’s current or past employers, it could prove he or she was not eligible.

She said for 2020 that amounted to about $150-million in benefits that the Department paid out and now wants back.

Hui told the committee Governor Mike Parson (R) has made clear that he wants the Department to seek collection of those overpayments, viewing them as taxpayer dollars that went to ineligible individuals.

Several legislators said they have heard from constituents who have been asked to pay back thousands of dollars in state or federal relief, sometimes months after they received it.  One constituent was asked to repay about $23,000.

“You’re going to be hard-pressed to find a more fiscally conservative person in here than me, but I think we screwed up as a state government, to ask folks [for that money] back this late in the game,” said Representative J. Eggleston (R-Maysville).

St. Ann representative Doug Clemens (D) said for Missouri to ask people already struggling financially due to covid to pay back thousands of dollars is wrong.

“Need I remind you of our median income in this state?  Most people in my district make $26,000 a year, and you’re asking for $11,000 payback?” said Clemens.  “We’re talking about keeping Missouri’s economy going.  We’re talking about equity and conscience … [It’s] taxpayers’ money, it’s these people’s money, and frankly we’re in a crisis.  They need to keep it. 

“Because that money’s already spent on mortgage, it’s already spent on food on the table, and frankly we have a responsibility to the common welfare here.”

Representatives, including Raychel Proudie (D-Ferguson), said the reasons given to individuals for their ineligibility were not always clear. She read a letter the Department sent to one of her constituents telling them they had to repay for a “miscellaneous reason.”  Proudie called that “unacceptable.”

“As a State of Missouri employee and someone elected, I sincerely apologize that this was the caliber of correspondence you got from a state agency because it tells you nothing … how dare us do that?” said Proudie.

Federal directives have given states the option not to require repayment of assistance from the federal government, which makes up the majority of the $150-million the Department overpaid.  Hui explained that Missouri is choosing to seek repayment of federal relief.

Proudie thinks the state shouldn’t be expending its resources to pull money from Missouri’s economy just to send it back to the federal government, and Representative Scott Cupps (R-Shell Knob) agrees.

“It may be as low as only $30-million of it’s from the [state] trust and $120-million of it is federal funds … you are not going to catch Scott Cupps in favor of rounding up money out of Missouri’s economy and sending it to Nancy Pelosi and Joe Biden in Washington D.C.” said Cupps.  “The feds are literally telling us, ‘Hey, forgive it.  Forgive it.’”

The Department is required by state statute to collect overpayments out of the state fund.

Dan Thacker represents a union including about 500 school bus drivers and monitors.  He said many of them make salaries that would put them near the poverty level, yet roughly 400 are being asked to pay back thousands of dollars.

“Now we want to take $9,000, $10,000 back from them?  Where are they going to get it?  These are hardworking individuals that did nothing wrong or fraudulent.  They simply did exactly what was urged for them by the Missouri Department of Labor.”

St. Joseph Republican Bill Falkner said any legislative action will have to balance the waiving of repayment by Missourians with protecting businesses, as some of these overpayments are charged to them.

“There’s consequences to every action that we want to do … we have to keep in mind what we can do for those businesses to protect them so we’re not asking them to pay for a mistake,” said Falkner.

Committee members also spoke directly to Missourians during the hearing.  Cupps said the repayment situation is adding to already heightened stress for struggling Missourians.  He wants them to know he and other legislators are paying attention, and are looking for a solution.

“There’s somebody that could get a letter in the mail that could say that they owe the state $7,200 back, and there could be divorces because of this,” said Cupps.  “I want people to know this:  do not do anything dumb because the state has sent you a letter that says you owe them money.  Don’t do it.  If you’re stressed out about it stop being stressed.”

Liberty representative Mark Ellebracht (D) asked Hui whether it makes financial sense for Missouri to seek these repayments.

“If all of these people begin to appeal … how much money are we looking at spending here … are we tripping over the dollars to get to the dimes when it comes to actually recouping this money?”

Hui told the committee that Missouri is on pace to need a loan to support the state’s unemployment trust, likely by around June.  She did not offer a projection of how great that loan might be.  She said this could cause employers to have to pay more, as that loan is repaid.

Witnesses and lawmakers alike suggested that repayment decisions have seemed arbitrary and inconsistent, with some people being ordered to pay back only federal funds, some to pay back only state funds, and some told to pay everything or nothing.

Three Democrats have filed bills to address unemployment relief overpayments:  Clemens, LaKeySha Bosley (St. Louis), and Peter Merideth (St. Louis).  The committee’s chairman, Jered Taylor (R-Republic) and Representative Cupps are developing proposals.