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VOL. 35 | NO. 23 | Friday, June 10, 2011

Checks in the mail soon for extended unemployment

By Colleen Creamer

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Thousands of unemployed Tennesseans on the Extended Benefits program are still without funds after a mix up in how the state and federal government calculates a state’s eligibility for the program.

The funds were being dispensed as usual in March, pulled abruptly in April, and then signed back into law recently by Gov. Bill Haslam. They are expected to resume in the coming weeks.

The program provides an extra 13 to 20 weeks of federal benefits to workers receiving unemployment in states that have a specific unemployment rate. In March, the Tennessee Department of Labor and Workforce Development (TDLWD) was informed by the US Department of Labor that, due to a slight drop in Tennessee’s unemployment rate, the EB program would be automatically -- and unexpectedly -- “triggered off.”

“The consensus among UI directors and the people in the region was that the program in Tennessee wasn’t in much danger because we still had an unemployment rate that was still higher than the national average,” says Don Ingram, employment security administrator for the TDLWD.

The department sent out letters to about 28,000 impacted claimants telling them their benefits would end April16. Many got letters after the April deadline and/or right along with a letter telling those on the previous tier that they qualified for EB.

In assessing a state’s eligibility for EB, the Department of Labor sets a minimum unemployment rate for eligible states using a 13-week rolling average over two previous years.

“Well, guess what happened,” Ingram explains. “We did fall below that rolling average. We were then notified that the last payable week of extended benefits would be the week ending April 16.”

Correcting the problem required Tennessee lawmakers to change the method for figuring Tennessee’s average rate unemployment rate, moving from a two-year average to three years.

When that didn’t happen in a timely manner, some blamed the gubernatorial transition from Phil Bredesen and Bill Haslam. House Minority Leader Craig Fitzhugh, D-Ripley, who eventually sponsored the bill to bring Tennessee back into compliance, says he believes it was less a misstep than anyone “dropping the ball.”

“I characterize it as it was just that the ball was laying there and nobody picked it up,” Fitzhugh says. “Then there was some confusion as to what the deadline was, whether it was an absolute deadline or one that could be extended.”

Fitzhugh says the legislation reinstates an estimated $50 million to $80 million in federal benefits.

Still, discussions were held as to whether the state could afford the added weeks, Ingram says.

“We all took a look at what the benefits were because, even though this is a federally funded program, there are costs to certain state and local governments, non-profits and state hospitals that are charged dollar for dollar for unemployment,” Ingram explains.

Fitzhugh says the issue was brought to him by constituents surprised when their benefits were suddenly gone.

“These folks are looking for a job,” Fitzhugh says. “They want to be employed. They want to pay taxes, and this money is available with very little liability on the state’s behalf, and I was just glad we could get it done. Some of my colleagues say, ‘Oh, look, if you can’t find a job in 79 weeks, then you are not going to find a job.’”

Retroactive benefits are expected to arrive in bank accounts and on the state’s new debit card some time in the next few weeks, Ingram says, adding the department does not know exactly when.

The nation’s unemployment rate rose slightly to 9.1 percent for May. In April, the nation’s rate was at 9 percent leaving some wondering if cutting off all federal funds in December would either happen, or, if it did happen, how impacted the nation’s unemployed would be. Congress has extended the deadlines a number of times.

“We will be back to 26 weeks instead of 99 weeks,” Ingram said. “That’s normal. The problem is the cost. The federal unemployment tax account is gone, and now the money is coming out of the general fund in Washington, which is the deficit.”

Valerie Ford-Greenway, a Nashville resident, was recently laid off and is unsure whether she will get a job in that time.

“It [26 weeks] may be enough time but it may not be,” Ford-Greenway says. “I don’t know. This is the first time I’ve collected unemployment and just as the emergency funds are coming to an end. I hear about these 99’ers [on unemployment for 99 weeks] who can’t find work in that time frame. I can’t get a job in my field and am considered overqualified for other sub-par jobs, so we’ll see.”

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