The Associated Press May 19, 2011, 8:32PM ET

Good news on Arizona unemployment equals bad news

Gov. Jan Brewer wants legislators to act in special session to prevent a cutoff of 20 weeks of extended unemployment benefits that are now at risk because Arizona's unemployment rate has dropped.

The jobless rate dropped to 9.3 percent in April from 9.5 percent in March as 10 of 11 economic sectors added jobs, the Department of Commerce reported Thursday. That's enough to reduce a three-month average to the point where a formula in state law will end eligibility for federally funded extended benefits, Department of Economic Security spokesman Steve Meissner said.

Eliminating the 20 weeks of federally funded extended benefits that about 15,000 people are receiving would stop benefits at 79 weeks, down from the current 99.

However, the state can prevent that by changing its formula -- something that wasn't done during the regular session that ended in April as lawmakers focused on other subjects.

"They dropped the ball," said Jeff Horn, a Phoenix resident who said he has exhausted his unemployment benefits since he lost a job as a machinist when the business closed in December 2008. "That's a federal program and it wasn't going to cost the state anything."

Brewer spokesman Matt Benson said the governor "absolutely wants to make this change" but that that she won't call a special session without a "broad consensus" among legislators.

That's because two-thirds votes by both the House and Senate would be needed to have the change take effect immediately, he said.

"The governor recognizes the importance of this issue and she's committed to working with legislative leadership to try to resolve it," Benson said.

Spokesmen for top House and Senate leaders said the leaders were consulting fellow lawmakers and having aides study the issue.

However, Senate President Russell Pearce, R-Mesa, expressed some reluctance earlier this week when asked about keeping the extended benefits.

"I have natural concerns about paying people to sit at home," he said. "We have a terrible unemployment rate, but do we incentivize people to not look for jobs?"

Rebekah Friend, Arizona AFL-CIO executive director, said it was appalling that unemployed Arizonans stand to needlessly lose extended benefits.

"Arizonans are at the mercy of the worst job market since the Great Depression," Friend said. "The fragile economic recovery continues, but right now the jobs just aren't there."

Meissner said official confirmation of the benefits change isn't likely for about a month and that implementation details have yet to be worked out.

Benson said Brewer is consulting with lawmakers on the issue and that legislative action would be needed in the next two weeks to prevent an interruption of benefits.

House Democrats have called for action on the issue.

"Choosing not to make this fix could mean the difference between a laid-off middle-class father being unable to put food on the table and finding a job," Rep. Debbie McCune Davis, D-Phoenix, said last month.

To keep the extended benefits, legislators would make a one-word change in a so-called "look back" formula so the current employment rate is compared with the previous three years instead of just the past two.

In its monthly unemployment report, the Commerce Department said most sectors' payroll increases were above historic averages as the economy added 17,200 nonfarm jobs in April.

Nearly all of the new jobs were in the private sector, the department said.

The biggest gains were reported in construction (3,900 jobs); educational and health services (3,400); and trade, transportation and utilities (2,900), the department said.

The hard-hit construction sector's gain is impressive but not necessarily indicating a trend, because the new work results more from repairs and renovations than new construction, said Aruna Murthy, director of economic analysis.

"This is just one month," she said. "I would not read too much into this."

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Associated Press writer Carmen Castro contributed to this report.


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