State leaders from both political parties remained unsure how much they’d have to contribute to receive federal funding. With states already facing budget shortfalls and unemployment systems ill-equipped to handle a new stream of federal cash, they also may be hesitant to accept benefits estimated by budget experts to last just weeks.
The multiple questions added urgency to calls for the Trump administration to reach a deal on coronavirus relief with congressional leaders, instead of relying on Trump’s Saturday night memo.
The memo said the federal government would provide $300 per week in additional aid to unemployed workers if their states also contributed $100. But in guidance to states late Sunday obtained by States Newsroom, the U.S. Department of Labor said the federal government would provide the additional $300 per week to states with or without the state match, adding
another layer of complexity.
“One big question is: Are states going to participate in it?” said David Super, a professor of administrative and constitutional law at Georgetown University’s law school. “I think most states won’t. I think many states will have difficulty doing it without approval from their legislatures, many of which have adjourned.”
In Virginia, a spokesperson for Democratic Gov. Ralph Northam was non committal. “We are continuing to review newly-released details from the US Department of Labor to determine how — and if — we can proceed,” said Northam’s spokeswoman, Alena Yarmosky, noting the state is already working with limited resources responding to the medical needs presented by the pandemic.
As of the end of August, 331,000 state residents were receiving unemployment benefits. Virginia has paid out more than a billion dollars in benefits and the state’s unemployment insurance fund is currently projecting a $750 million deficit by the end of the year.
A spokesperson for Ohio Gov. Mike DeWine, a Republican, said Monday the state would likely take the option not to contribute, which would mean unemployed workers in Ohio would receive $300 a week rather than $400, the Ohio Capital Journal reported. That would be half of the $600 a week
extended in a March relief bill that expired July 31.
Senate Minority Leader Chuck Schumer (D-N.Y.) said Trump’s attempt on unemployment benefits is a “disaster” and won’t work. “It is so put together with spit and glue, that in all likelihood many states won’t implement it at all, some have said so, and many more even if they want to implement it will take months, several months, while people will not get their unemployment benefits,” Schumer said on the Senate floor.
Under the cost-share formula laid out in the memo, the federal government would spend about $44 billion and states would be required to contribute almost $15 billion. That price tag may shock states that have seen revenues decline and costs skyrocket as they respond to a pandemic that
has also put millions out of work.
The Sacramento Bee reported that Democratic Gov. Gavin Newsom estimated the tab for California could be $770 million.
In addition to the ongoing weekly cost to states, participating in the program would require them to overhaul unemployment computer systems at a time when many states are facing dire financial situations.
Governors call on Congress to act
National Governors Association Chair Andrew Cuomo, D-N.Y., and Vice Chair Asa Hutchinson, R-Ark., said in a joint statement that governors “appreciate the White House’s proposals to provide additional solutions to address economic challenges; however, we are concerned about the significant administrative burdens and costs this latest action would place on the states.”
The governors said the president should return to negotiations with Congress to provide more sustainable relief to states.
White House press secretary Kayleigh McEnany said Monday that unemployed Americans should see the new benefits “quickly and close to immediately,” but “a lot of this will depend on states and them applying.” She noted that states can use funds from the CARES Act, the earlier federal coronavirus relief bill, for their contribution, and blamed Democrats for not continuing in talks to come up with a compromise.
“Within the next week or two, most of the states will be able to execute,” Treasury Secretary Steven Mnuchin said Monday night.
Brian Sigritz, the director of state fiscal policy at the National Association of State Budget Officers, said there were several outstanding questions about how the program would be administered.
Under the executive memo, federal funding would come from the Federal Emergency Management Agency’s Disaster Relief Fund. But that fund is typically paid out as a reimbursement, meaning states could be required to pay the money upfront.
The potential expense of the program would undercut other state initiatives, he said.
“States would have to choose between paying enhanced unemployment benefits, and directing funds to education needs such as safely reopening schools and providing for remote education, public health demands including testing and contract tracing, and economic support programs,”
Several states and groups representing their interests in Washington said they needed more information before they could figure out what to do.
“It is still too early to tell what the impact of the president’s executive action will have on state unemployment,” said Zach Herman, a policy associate with the National Conference of State Legislatures. “States are still waiting on further guidance from the White House and the Department of Labor. …. Without further clarification from the Department of Labor and White House the impact is unclear.”
The Sunday guidance promised more information in a Monday phone conference but as of Monday afternoon, states were still waiting on that, according to a spokesperson for the Michigan Department of Labor and Economic Opportunity.
“While the President has enacted a series of executive orders regarding unemployment benefits, this program has not yet been implemented,” the spokeswoman, Erica Quealy, wrote in a Monday afternoon email. “All states are currently awaiting guidance from the US Department of Labor
In a statement, Michigan Gov. Gretchen Whitmer, a Democrat, said the move would hurt the recovery effort because it didn’t equal the expired $600 weekly benefit.
“He cut federal funding for unemployed workers and is requiring states that are facing severe holes in our budgets to provide 25 percent of the funding,” Whitmer said. “His refusal to provide full federal funding to states across the country to help us combat this virus will hurt the brave men and women on the front lines of this crisis.”