Gov. Doug Ducey has no plans to use state resources to make up for the fact that more than 430,000 Arizonans will see their jobless benefits cut by more than half within weeks.
“It’s on Congress,” the governor said Thursday when asked about the rapidly depleting federal account that is providing unemployed Arizonans with an extra $300 a week.
The last week for the extra payments could come at any time, Michael Wisehart, director of the state Department of Economic Security, said a week ago. And when the end comes, it will be sudden, with no advance warning, he said.
That will leave Arizonans who have lost their jobs through no fault of their own — some due to Ducey’s policies shuttering or curtailing certain businesses during the pandemic — with a maximum of $240 a week.
On one hand, Ducey said the state does have “money in the bank.”
“We have been financially responsible,” he said. But he called questions from Capitol Media Services about the state filling in some, if not all, of the lost benefits “hypothetical.”
Ducey’s message to unemployed Arizonans, if congressional action does not happen, was simple: “Plan ahead,” he said.
He brushed aside questions of whether he could live on $240 a week, which is the second-lowest state jobless benefit in the nation, with only Mississippi’s lower.
“This is on Congress,” he repeated.
Separately, the governor said the fact that President Trump admitted to journalist Bob Woodward that he publicly downplayed the risk of COVID-19 in February did not affect Arizona’s response to the virus.
“There has been a sense of urgency and seriousness about this since Day 1,” Ducey said. That included activating the state’s Health Emergency Operations Center in January to track suspected and confirmed cases and his declaration of emergency in March.
And the Republican governor said he trusts Trump and the administration.
“Trust is built through experience and actions,” Ducey said. “And on every ask that the state of Arizona has had, either to the president or the administration, they have delivered.”
It was an executive action by Trump that allocated $44 million in August to provide the extra $300 a week in unemployment benefits, after Congress failed to agree to continue the $600 weekly bonus provided earlier in the pandemic. Ducey put Arizona’s share of the August allocation at $725 million.
The Republican-controlled U.S. Senate considered a bill Thursday with funds for $300 supplemental benefits for the unemployed. But it is considered dead on arrival because Democrats want $600 payments, hazard pay for essential workers and a second round of stimulus checks.
In Arizona, aides to Ducey said he has set aside $400 million from the federal Coronavirus Aid, Relief and Economic Security Act, some of that being money he did not divide among Arizona cities, towns and counties.
Ducey has some other ideas about how he wants to spend the money. Those include providing some financial relief for businesses that are facing higher unemployment taxes by the end of the year.
From Ducey’s perspective, that leaves only the possibility of federal action to keep benefits from shrinking.
There is a separate question about the status of the financial stability trust fund, a special account that provides the money for Arizona’s $240-a-week unemployment benefits.
Before the pandemic there was more than $1.1 billion in the fund, all of it financed by a tax paid by employers on the first $7,000 of each worker’s salary.
And as of Sept. 5, there was less than $358 million available, and $50 million more a week is being paid out in benefits than taken in from employers.
If the trust fund becomes insolvent, the state would have to borrow the money from the U.S. Labor Department, and to pay it back through higher taxes on employers. That is why Ducey is looking at using some of the CARES money to replenish the trust fund, which would likely be a stopgap solution.
There are indications the situation is not getting better. The 430,000 Arizonans now collecting benefits compares with 371,100 in the week ending Aug. 8.
The weakest sector remains leisure and hospitality jobs, particularly among bars and restaurants. Ducey has shuttered the former entirely unless they change their mode of operation and agree to restrictions to help slow the spread of COVID-19. And although restaurants can open, they are limited to 50% capacity.