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Bill seeks to shield Nevada from federal sequestration cuts to extended unemployment benefits
Summary
Senate Bill 11 would change how sequestration applies to the state's extended unemployment benefit program so that benefit payments match available funds and avoid unanticipated state costs, state officials told the Assembly committee.
The Assembly Commerce and Labor Committee heard testimony on Senate Bill 11, which would revise how Nevada applies federal sequestration to the state’s extended benefit (EB) program.
Chris Sewell, director of the Department of Employment, Training and Rehabilitation (DETR), introduced the bill and said its genesis is federal sequestration that can reduce federal funding for permanent programs. He turned technical questions to DETR staff, including deputy director Troy Jordan and the department’s chief economist, David Schmidt.
Schmidt told the committee the measure is intended to prevent surprise costs to the state if the federal share of the EB program is reduced by sequestration. He explained the four tiers of unemployment programs: regular UI (up to 26 weeks), the EUC program typically created by Congress in recessions, PUA (Pandemic Unemployment Assistance, unrelated to this bill), and the state’s extended benefit program. “The extended benefit program as it functions in law is designed as a fifty‑fifty split between the state and the feds,” Schmidt said. He added that sequestration reduces certain federal payments and that, in practice, the federal share subject to sequestration reduces the overall EB funding by roughly 2.3–2.5 percentage points in recent years.
Schmidt gave a practical example: for a $500 weekly EB payment, a sequestration effect could reduce the federal contribution so the federal share would provide about $488.50 rather than $500. Because Nevada law sets the weekly benefit amount, the state could be on the hook for the shortfall unless the statute provides an adjustment mechanism. SB 11 adopts model language from the U.S. Department of Labor to allow benefits paid to match available funds and to avoid unexpected state costs.
Paul Moratkin of the Las Vegas Chamber testified in support, saying the bill protects the solvency of the state UI trust fund in a potential recession. No opposition testimony was offered during the hearing.
No committee action or vote was recorded in today’s hearing; Chair Marzola closed the hearing and moved to the next agenda item.
Why it matters: supporters say the change would reduce the risk that sequestration leaves Nevada with an unfunded obligation to preserve statutorily established weekly benefit amounts.
