Sequester Cuts to Federal Unemployment Benefits Start to Hit in Many States
Posted by: Mitchell Hirsch on May 03, 2013
Update 7: June 12, 2013
During the last ten weeks, nearly all the states and the District of Columbia have implemented cuts to benefit amounts paid under the federal Emergency Unemployment Compensation (EUC) program – damaging cuts mandated under the mindless and harmful federal budget sequester that was triggered March 1 by Congressional failure to enact rational budget policies.
Eighteen states and D.C. reduced benefit amounts for all EUC recipients by 10.7% starting either March 31 or April 6. Those were: Arkansas, D.C., Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, New York, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Vermont, West Virginia and Wisconsin.
These were the states that were the earliest to implement the sequester cuts to EUC benefits. For the average claimant in these states, the EUC benefit has been reduced by $39 per week, or $155 over the course of a month. These are funds unemployed workers would otherwise spend on rent, monthly utility bills or groceries for their families. Even a 10.7% benefit reduction hurts a lot.
States that implement the cuts later will be taking deeper percentage or other forms of reductions.
Rhode Island reduced EUC benefits by 12.2% beginning April 21. Alabama, Delaware, Hawaii, Massachusetts and Mississippi all implemented cuts of 12.8% beginning April 28 for the week ending May 4.
Alaska cut federal EUC benefits by 23.2% for all new EUC and next-Tier claims starting May 19.
Arizona will cut all EUC benefits by 16.8% starting June 2.
In California, where an estimated 355,000 unemployed workers receive the federal benefits that are available when regular state benefits run out, EUC benefits will be cut by 17.7% starting April 28 – but for new EUC claims and those moving to a next Tier of EUC only.
Colorado has cut federal EUC benefits by 18.22% as of April 28 for all new EUC claims and next-Tier EUC claims.
Connecticut will reduce all EUC payments by 19.2% starting June 16.
Illinois will reduce all EUC payments by 16.8% starting May 27.
Maryland will cut all EUC benefits by 22.2% beginning June 30.
Montana will reduce all new EUC Tier 1 benefits by 19.58% starting May 5.
New Hampshire will reduce EUC benefits by 16.7% starting April 28 – but only for benefits paid on new EUC claims.
New Jersey will cut all EUC benefits by 22.2% starting June 30.
New Mexico will reduce benefits by 25% on all new EUC Tier 1 and new Tier 2 claims starting June 2.
Nebraska will cut benefits by 19.38%, but only for new EUC Tier 1 claims starting May 5.
North Dakota cut all new EUC Tier 1 claims beginning April 28 by 18.03%.
In Ohio, starting May 5, new EUC claims and next-Tier claims will have benefits reduced by 16.36%.
South Dakota is reducing all EUC benefits by 16.8% starting June 2.
Utah is reducing benefits for all new EUC claims by 17% after April 28.
Virginia cut all EUC benefits by 14.2% starting May 12.
In Washington, benefits will be cut by 21 percent beginning May 19 for all new EUC claims and next-Tier EUC claims.
Wyoming will reduce benefits for all new EUC claims as of May 26 by 23.08%.
Two states will implement EUC sequester reductions by opting to not pay any EUC benefits for three specified weeks prior to September 30, 2013:
Missouri will pay no EUC benefits for claim weeks ending June 1, July 27 and September 21.
South Carolina will eliminate one week of benefits for all EUC claimants for specific weeks in May, July and August. No federal EUC benefits will be paid in S.C. for the claim weeks ending May 18, July 13 and August 31.
Eligible EUC claimants in Missouri and South Carolina are advised to continue filing claims for those weeks, even though benefits would not be paid, to ensure continued eligibility.
Two other states, claiming they could not implement the sequester cuts to EUC benefits any other way, will eliminate available weeks of benefits from an EUC Tier:
Florida will eliminate the last 4 weeks of EUC Tier 3 benefits as of May 26, leaving only 3 weeks of Tier 3 eligibility. Claimants who have already exhausted 3 or more weeks of Tier 3 benefits as of May 26 will have their EUC benefits end.
Maine will reduce the number of weeks of available benefits in EUC Tier 3 from 9 weeks to just 1 week – eliminating the last 8 weeks of benefits available starting May 12.
Among the states that have yet to either implement benefit reductions or announce plans to do so, the difficulties in programming the cuts have been blamed largely on under-funded and outdated computer technology and archaic software systems. Barring Congressional action to repeal the sequester – something a rational legislative body would already have done – the worse the benefit cuts will be in states that have delayed implementing EUC reductions. The longer states take to implement the sequester cuts, the larger the percentage reductions and the more harm those reductions will cause unemployed workers and their families.
With sequestration in the current fiscal year imposing $85 billion in across-the-board spending cuts covering the period ending September 30, 2013, the U.S. Department of Labor has said that states need to have their reductions implemented before July 1. But a few states may well push implementation beyond that date.
The remaining states that, as of June 12, have yet to schedule or announce their planned percentage reductions are: Louisiana and Nevada.
North Carolina is scheduled to stop paying any and all federal EUC benefits as of July 1 due to the enactment of draconian cuts to its regular state benefits, in violation of its federal EUC agreement.
Regular state unemployment insurance benefits, which extend for the first 26 weeks of eligibility in most states, are not affected by the federal budget sequester.
The federal EUC program makes benefits available in a set of Tiers, and states are eligible to pay the various Tiers depending on their 3-month average unemployment rate. Currently, all states qualify for up to 14 weeks in EUC Tier 1. States with unemployment rates of 6% or higher are eligible to pay up to 14 additional weeks in Tier 2. States with rates of 7% or higher are eligible for an additional 9 weeks of benefits in Tier 3. And states with 9% or higher unemployment rates can pay up to an additional 10 weeks in Tier 4. Currently, the only states paying Tier 4 benefits are California, Illinois, Mississippi, Nevada, New Jersey, North Carolina and Rhode Island.
Nearly two million unemployed workers in the U.S. currently receive federal EUC benefits.
The sequester, meanwhile, is coming down the hardest on those least able to cushion its blow. In addition to an estimated 3.8 million long-term unemployed workers who will suffer benefit cuts of anywhere between 10.7% and 22.2% this year, the sequester will force 70,000 children out of Head Start, put the jobs of 10,000 teachers and 7,200 special education teachers, aides and staff at risk, and eliminate four million meals from Meals on Wheels for seniors.
A few weeks ago, Congress acted with astonishing speed to halt the furloughs of air traffic controllers due to sequester cuts, and avert mounting flight delays for air travelers, by shifting funds from airport construction and maintenance to FAA operations. But it has shown no interest in ending the sequester's damaging impact on long-term unemployed jobseekers and millions of other Americans hardest hit by the sequester's deep budget cuts and the economy's slow recovery.
In a statement following the report of better-than-expected but still only moderate job gains in April, Christine Owens, executive director of the National Employment Law Project (NELP), noted that the stronger job growth the economy needs is being hampered by the budget cuts and reduced spending power being caused by the sequester.
“Anyone in Congress who cares about keeping our economy moving in a positive direction should make repeal of the sequester sledgehammer an immediate priority,” Owens said. “For the good of all the American people -- not just a few -- Congress must repeal the sequester when it returns next week.”
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