BATON ROUGE, La. (WAFB) - Roughly 200,000 jobless Louisianans could miss out on an additional $400 weekly federal unemployment benefit because Louisiana does not have enough money to pay its share of the cost, Governor John Bel Edwards warned during his press conference Tuesday, Aug. 11.
President Donald Trump extended federal unemployment aid to states through an executive order Saturday, Aug. 8 after Congress failed to reach a compromise on another coronavirus relief bill. An additional $600 weekly benefit expired at the end of July.
Most governors believe Trump’s plan requires states to cover 25% of the cost, though the president’s own descriptions of his measure have been inconsistent.
“It may be that they’ll pay nothing, in some instances,” Trump said Monday, Aug. 10, contradicting prior descriptions of his bill and his own labor secretary. “We can make a decision on that on individual states with an application.”
Louisiana would have to come up with $100 for every unemployed person to unlock the additional $400 federal package.
Gov. Edwards is considering reducing the benefit the state offers by $100 and redirecting those savings to cover the costs. That means a Louisianan receiving the maximum federally-boosted benefit would take home $547 each week instead of $647, which is still more than the $247 currently provided.
But roughly 200,000 Louisianans receive less than $100 from the state each week, meaning their entire benefit could be eliminated and it would still not be enough to unlock the additional funds.
“Early indications are that any worker in Louisiana who isn’t getting $100 in state benefits will not be able to get the [additional money],” Edwards said.
He says the state’s labor department leaders are seeking clarity from the federal government.
“We’re seeing enough challenges around standing up this brand new program, getting it funded out of the disaster relief fund, having the states figure out how they can come up with their 25 percent match, or what the ramifications would be if they can’t come up with their match, that you’ll continue to see a big push to say this is just not an acceptable alternative,” Gov. Edwards said. “We need Congress to sit down and work out a compromise.”
The confusion comes as Louisiana’s unemployment fund dwindles. Edwards says without congressional help, the fund will run out. The fund is worth roughly $253 million as of Aug. 11, down from $1.1 billion at the beginning of March.
“I have no doubt that we are going to, at some point, have a trust fund that is insolvent,” he said. “It’s already a certitude.”
When that happens, the state would have to take out a loan from the federal government that would trigger a tax increase on businesses and another reduction of state unemployment benefits. Gov. Edwards cannot suspend this provision of law that aims to replenish the pot of unemployment money in emergencies.
“Nobody thinks this is a good time to have employers pay more,” Gov. Edwards said, calling on Congress to appropriate more money in the next coronavirus relief bill to states to replenish unemployment funds.
The governor says he expects clarity on the unemployment question soon.
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