April 18, 2013

Maine may drop out of emergency unemployment program

The state might leave the federal program because of issues resulting from automatic federal budget cuts

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

AUGUSTA – Maine is among the states thinking about opting out of an emergency unemployment program because of problems resulting from automatic federal budget cuts, according to an internal document obtained by the Press Herald.

The Emergency Unemployment Compensation Program is a federally funded, state-run program that provides benefits to most unemployed people for up to 37 weeks after exhausting 26 weeks of traditional benefits. The program currently serves approximately 5,500 people in Maine, said Laura Boyett, director of the Maine Department of Labor's Bureau of Unemployment Compensation.

An information sheet released recently by the White House said federal cuts would reduce benefits by just under 11 percent for the final nine months of the year. In Maine, where the maximum weekly benefit is $372, the average benefit of $281 was due to drop to about $250. However, that figure is based on a March 31 implementation date, which the state failed to meet.

The longer states wait, the deeper the cuts to benefits will have to be. If, for example, a state waits until June 30 to implement benefit cuts, it would have to slash them by more than 22 percent, according to the White House fact sheet.

Boyett said the state is currently reviewing "all options that might be available" for making the adjustment.

But in a March email, obtained by the Portland Press Herald in a public-records request, Boyett wrote to an employee that she was putting together an analysis for Labor Commissioner Jeanne Paquette and Gov. Paul LePage's office "to make the decision about opting out" of the program.

"Although it makes the most practical sense, it will be a nightmare from a public relations and potentially, (l)egislative perspective," Boyett wrote.

In a brief interview Wednesday afternoon, Boyett declined comment and apparently handed the phone to a staffer after she was asked why opting out might make the most sense.

Adam Fisher, a public information officer for the department, picked up and said, "We'll have to call you back." Nobody from the department called back Wednesday, but Julie Rabinowitz, a department spokeswoman, answered some questions by email.

Rabinowitz confirmed reports that the potential cost of altering the state's computer system to handle the change in benefits will be a factor in the department's decision.

Rich Hobbie, director of the National Association of State Workforce Agencies, an organization of state administrators of unemployment insurance laws, said uncertainty around the availability of the emergency funds has many states thinking that eliminating the program could be better than spending money to make needed changes.

In a March letter, the association sent a letter to members of Congress saying that due to a historic lack of federal funding, most state workforce agencies are running antiquated computer systems -- some more than 25 years old -- that aren't easily updated to reduce benefits.

"It comes down to the difficulty of reprogramming the system, the time it takes to reprogram the system and the cost," he said. "It's not clear yet that the federal government will be able to cover the full cost of the necessary changes in most states."

Hobbie said 10 states are undecided about continuing the emergency program, but he couldn't identify them.

As for Boyett's suggestion that eliminating benefits could face legislative opposition, Assistant Senate Majority Leader Troy Jackson, D-Allagash, agreed Wednesday that he is concerned about the potential effect.

"It seems to me it'll have a mass effect of throwing a bunch of people with no other option except depressed wages and jobs that they're (overqualified for)," Jackson said.

Michael Shepherd can be contacted at 370-7652 or at:

mshepherd@mainetoday.com

On Twitter: @mikeshepherdme 

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