Governor Uses Federal Cash To Increase Unemployment Fund

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PHOENIX (AP) – Arizona Gov. Doug Ducey dipped into a jar of emergency federal money on Monday to replenish the state’s UI trust fund, raising it above the level qu ‘it was before the March 2020 pandemic and almost wiped out the fund balance.

The Republican governor’s decision aims to prevent the surge in insurance premiums paid by companies. And it happened the same week that an extra $ 300 a week wage for the unemployed will stop under a Ducey order designed to force people back to work.

The governor deposited $ 759 million of the $ 4.8 billion Arizona received from the Biden administration’s US bailout into the trust fund. This is the first time the governor has used money allocated by Congress in March.

In addition to an earlier deposit of $ 76 million from federal coronavirus relief money, $ 62 million from state money approved by the legislature, and a rebound in the fund as employers paid bonuses, it now has a balance of nearly $ 1.2 billion.

The fund had grown from $ 1.1 billion before the pandemic hit to less than $ 90 million in February.

“Small businesses are the backbone of Arizona’s thriving economy, and we are committed to protecting them from tax hikes,” Ducey said in a statement. “They create jobs and support our communities, and it’s crucial that we don’t let massive tax hikes put them out of business.

Employer premiums are currently around $ 160 per year per employee, but could increase if the trust fund drops below zero and the state has to borrow from the federal government. The fund builds up during good economic times and declines during times of high unemployment, with federal liquidity ensuring benefits continue if they are depleted.

Ducey announced in May that he would end the additional $ 300 per week in federal unemployment benefits starting this week, joining a large number of Republican-led states that decided to end the program in the midst of complaints from employers that they had difficulty persuading people to come to work.

Economists say there are various reasons some people don’t return to work, including fear of the virus, lack of child care and for some, extra unemployment benefit.

But at $ 540 per week with the current federal supplement of $ 300, an unemployed worker in Arizona receives only $ 1.35 more than the state’s minimum wage of $ 12.15 an hour.

Arizona’s standard weekly unemployment benefit is only $ 240 per week, lower than Mississippi’s. At $ 240 per week, the unemployed will get $ 6 an hour.

The legislature and governor agreed to increase that amount to $ 320 per week as part of the state budget deal reached last month, but those will not be implemented until next year.

According to statistics from the Department of Economic Security, approximately 28,000 Arizonans receive regular unemployment benefits, as well as approximately 115,000 receive payments for previous work in the odd-job economy or are self-employed. These people are not normally eligible.

At the start of 2020, the number of unemployed was around 11,000. New weekly claims reached 181,000 in May 2020 and are now less than 2,000 per week.

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