Wednesday, July 15, 2009

Texas jobless benefit fund nearly tapped out

Texas jobless benefit fund nearly tapped out
82,000 to face delays; $643M to be borrowed from U.S.
By Robert T. Garrett
Wednesday, July 15, 2009

Texas' unemployment insurance trust fund will run out of money early next week and will have to borrow $643 million from the federal government to cover claims through Oct. 1, a Texas Workforce Commission official said Tuesday. Also, commission spokeswoman Ann Hatchitt confirmed that about 82,000 unemployed Texans due to exhaust their benefits, starting this week, will not receive immediate 13-week extensions as expected.

In late May, the Legislature hastily passed a law that would draw down full federal funding for the extended benefits, as allowed by the federal stimulus package.

However, stringent federal rules and state computer problems have thwarted the launch of the new benefit, even though delay means that some people will lose benefits, Hatchitt said. She emphasized that payments for those who qualify will be retroactive to the date they're cut off.

Randy Townsend, the commission's chief financial officer, said at the commission's monthly meeting that about 285,000 Texans had stayed on unemployment compensation in the six weeks that ended June 27, nearly triple the number in the same period last year.

LaSha Lenzy, the commission official in charge of unemployment insurance, said 155,729 callers couldn't get through to the commission's call centers last week.

"That was expected," she said, because a new quarter began and claimants unsuccessful in the previous quarter often check to see whether they now qualify.

But Lenzy said also that a computer system unexpectedly shut down for four hours Monday morning.

For the week that ended July 4, the latest for which data are available, the state paid out $93 million in benefits, Lenzy said.

Townsend said the trust fund had only $119 million as of Friday.

Although it has been expected for months that the commission would have to take out interest-free loans from the U.S. Department of Labor to keep paying unemployment benefits, the official statement drew criticism.

State Democratic Party Chairman Boyd Richie said Texas should have accepted $556 million in federal stimulus funds to expand unemployment benefits. Gov. Rick Perry rejected the money, saying too many strings were attached.

"Unfortunately, hardworking Texas taxpayers and struggling businesses will shoulder the burden of Rick Perry's failure to do the right thing for our state and accept the unemployment insurance funds," Richie said.

But Perry said that the borrowing is routine. The state borrowed from the federal government in 2003, he said.

Perry, a Republican, said accepting the money would have required looser eligibility rules, burdening employers for years to come.

"I'm a big believer that you do not put additional burdens on businessmen and women — the job creators, wealth creators — in this state," he said.

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HermitJim said...

Damned if you do, and damned if you don't! Some folks just can't win for losing, huh?

Good post!

Anonymous said...

But how can this be? The Talking Heads all say the recession is over and the stock market is doing well. What else could matter!