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Committee hears proposals to raise Maryland's maximum unemployment benefit and update taxable wage base
Summary
Delegate Lorig Charkoudian and supporters told the Economic Matters Committee that House Bill 554 would raise the maximum weekly unemployment benefit from $430 to 50% of the average weekly wage and update the taxable wage base (currently $8,500) to shore up the UI trust fund. Supporters said boosted benefits help households and local economies;
Delegate Lorig Charkoudian presented House Bill 554 on Feb. 26, proposing a series of changes to Maryland's unemployment insurance system intended to increase weekly benefits and shore up the state UI trust fund.
The bill would raise the maximum weekly benefit from the current cap of $430 to 50% of the state's average weekly wage (about $746 based on testimony), and would update the taxable wage base (the portion of wages subject to UI tax) that has remained at $8,500 since 1992. Charkoudian said the changes are designed to keep benefits meaningful, improve job matching and stabilize the trust fund against future downturns.
Supporters, including labor representatives and community groups, said higher benefits reduce financial distress for families, help sustain local economies and allow more efficient job matching. Lona Muckle of the CASH Campaign noted that many clients earn under $20,000 a year and that UI is a vital safety net. Union witnesses testified that construction workers and other intermittently employed trades rely on UI between jobs.
Opponents from NFIB, the Maryland Chamber and the Retailers Alliance warned the committee the bill would raise employer UI taxes substantially. NFIB said the fiscal note foresees large increases in employer contributions as the taxable wage base grows; the business groups urged a broader discussion or staged approach, and suggested convening the UI oversight panel. Several opponents highlighted the bill's automatic indexing mechanisms and long-term fiscal impacts on small employers.
Charkoudian said the bill builds on extensive prior study, including work by the Upjohn Institute and the Department of Labor, and modeled scenarios showing the trust fund is at risk if current parameters remain unchanged. She and proponents argued that modest increases in benefit levels have only a small effect on average duration of unemployment and produce net gains in earnings and economic activity.
No final action was taken. Committee members expressed interest in additional fiscal modeling and potential amendments to address employer concerns and the trust fund's long-term solvency.
