Bloomberg News

Arizona Inaction May Cut Extended Federal Jobless Aid

June 08, 2011

(State corrects recipient data in ninth paragraph of story originally published June 7.)

June 7 (Bloomberg) -- Arizona may cut off jobless benefits for about 15,000 people and stop $3 million a week flowing into the economy unless legislators reconvene to revise a law to match federal rules as more than half of U.S. states have.

The one-word change would keep extended jobless aid coming after June 11 under a benefits formula, the state Economic Security Department has said. Changing the law to conform with federal rules is needed after Arizona’s unemployment rate fell.

The U.S. pays for extended benefits if a state had at least 10 percent higher unemployment than three years earlier, after changing the “look-back” period from 24 months. Arizona’s April jobless rate at 9.3 percent was unchanged from the same month in 2009 while almost double April 2008’s 4.9 percent. To keep aid flowing the state must change its look-back rule, yet Republican lawmakers in Phoenix are reluctant to act.

“There are jobs that people can find, but people are sitting, waiting for a job like the one they had,” Senate Majority Whip Steve Pierce said June 3 in a telephone interview, explaining why he and most of his Republican colleagues oppose extending benefits. If recipients are cut off, they “would find something to do,” he said.

Without the alteration in state law to look back three years instead of two, benefits stop after 79 weeks. A 20-week extension would be available if the change is made, all of it federally funded. At least 27 states have made similar revisions, according to the New York-based National Employment Law Project, a nonprofit advocacy group.

Pending in Pennsylvania

In Pennsylvania, where 45,000 workers face losing benefits June 11, the House of Representatives this week may take up a bill extending the aid. The Senate has passed the measure.

North Carolina recently modified its rules after extended benefits lapsed in mid-April, renewing aid to jobless workers there. In Wisconsin, where aid also ended in April, Governor Scott Walker has asked an advisory panel to back a similar move.

Arizona Democrats and Governor Jan Brewer, a Republican, haven’t been able to persuade enough members of her party in the Senate to reconvene this week to deal with the issue. The Legislature didn’t take it up before adjourning on April 20.

Without the change, another 29,000 workers may lose benefits by year-end, bringing the total to almost 45,000, and about $90 million may be kept out of the state’s economy, the Economic Security Department estimates. The state’s unemployment rate in April fell from 9.5 percent in March, which was 0.5 percentage points higher than two years earlier, according to data compiled by Bloomberg.

Jobs Decline

The number of jobs available in the U.S. West is falling, according to data from the Labor Statistics Bureau. Job openings in the region fell to 685,000 in April from 752,000 in March and 723,000 a year earlier, the agency said today.

Brewer “remains supportive” of making sure Arizonans receive the extended benefits, said Matt Benson, a spokesman for the governor. Last month, Benson told the Associated Press that she won’t order lawmakers into a special session unless there is a “broad consensus” among legislators to make the revision. Passage by a two-thirds majority in each chamber is needed for the change to be effective immediately.

North Carolina Governor Beverly Perdue, a Democrat, ordered the benefits restored on June 3 for 47,000 workers through a change in the rules to match federal law. She didn’t wait for the Republican-led Legislature because state lawmakers “held our unemployed workers as hostages by tying the extension of benefits to my acceptance of budget bills that would inflict severe and unnecessary cuts to our schools and other essential programs,” according to a statement on the governor’s website.

Alabama Change

Lawmakers in Alabama passed a change to permit the longer look-back on June 2, with little opposition, according to Representative Jack Williams, a Republican from Vestavia Hills and a sponsor. He said that about 16,000 people would have lost benefits this month without the revision, which is expected to be approved soon by Governor Robert Bentley, another Republican.

“The Feds are going to spend this money and we have folks in our state who need help,” Williams said. “We are not talking about 16,000 people sitting on their butts not looking for work.”

Walker’s push to make the change in Wisconsin was delayed last week after the advisory panel the Republican had asked to endorse the move couldn’t muster a quorum, according to the Milwaukee Journal Sentinel newspaper. In pushing for the change, Walker stressed that the federal aid wouldn’t have to be repaid.

‘Craziness’ in Phoenix

House Democrats in Phoenix say letting benefits end hurts families and keeps money out that would help the local economy. Minority Leader Chad Campbell said the reluctance to make the change to permit the extension amounts to “craziness.”

“You’re talking about helping out 15,000-plus people who are trying to find work,” he said in a telephone interview. “It is a very simple fix.”

Campbell dismissed the view that some among the unemployed simply don’t want to work as “a mythical perception.”

Jobless Arizonans are “stuck in a bad economy and trying to find work,” he said.

Pierce, the Senate Republican, said he thinks that the unemployment rate will fall once benefits run out and recipients who have been cut off will find jobs.

“If I am wrong, then there is always time later to do something about it,” he said.

--With assistance from Romy Varghese in New York. Editors: Ted Bunker, Pete Young, Jerry Hart.


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