Gov. Asa Hutchinson isn’t yet sure how President Donald Trump’s executive order on unemployment benefits will work in Arkansas and wants more information from the feds before possibly spending an estimated $265 million on extended jobless benefits.
Unemployment insurance benefits that provided an extra $600 a week and paid benefits to the self-employed, fully paid for by the federal government, expired at the end of July. Congressional leaders have yet to compromise on legislation to extend and adjust the benefits. President Trump on Aug. 8 issued an executive order that would support extension of jobless benefits by using disaster relief funds (DRF) from the Federal Emergency Management Agency (FEMA) and COVID relief funds previously provided by Congress to the states.
“I am hereby directing the Federal Emergency Management Agency [FEMA] to assist in providing benefits from the DRF, and am calling upon the States to use their CRF allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the COVID-19 outbreak,” President Trump noted in his order. “To provide financial assistance for the needs of those who have lost employment as a result of the pandemic, I am directing up to $44 billion from the DRF at the statutorily mandated 75 percent Federal cost share be made available for lost wages assistance to eligible claimants, to supplement State expenditures in providing these payments.”
However, it is unclear what system states would use to distribute the funds, if all states can afford to provide a 25% match to the 75% from FEMA funds, or even if the executive order is legal.
The governor said Monday (Aug. 10) that he, Arkansas Secretary of Commerce Mike Preston and Secretary of the Department of Finance and Administration Larry Walther “worked on this over the weekend, trying to get a handle on what that exactly would mean for Arkansas.” Preston said around 120,000 Arkansans would benefit from enhanced compensation, and the state’s cost – under what they preliminary know about Trump’s order – would be an estimated at $265 million through the end of the year.
Gov. Hutchinson said the state might have to tap into the $250 million in CARES Act reserve funding set aside by the state’s CARES Act steering committee. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was approved by Congress earlier this year to provide aid to individuals, businesses and state and local governments in response to the pandemic. Arkansas received about $1.25 billion from the Act.
The governor also said Trump’s executive order would require a new appropriation bill from the Arkansas Legislature because the unemployment benefits would come from a different federal agency and require different action by the state. He said seeking that legislation would only add more time to the process.
“The best solution is for Congress to reach an agreement that we can have the continued ability to provide the unemployment compensation at some level of increased support for those that are on unemployment,” Gov. Hutchinson said.
For now, the governor said he and other state officials are “in a holding pattern” until moving forward on any plans to distribute funds based on Trump’s executive order.
“I want more information first. I want additional guidelines from the federal government as to how this will work,” he said.