State applies for FEMA jobless funds, will not make $100 weekly match

Arkansas officials have applied to the Federal Emergency Management Agency to tap money for enhanced jobless benefits prescribed under a recent executive order from President Donald Trump. However, the state is not planning to pay a $100 weekly match allowed under the order.

Gov. Asa Hutchinson said Wednesday (Aug. 19) the state has submitted the application but it can be withdrawn if circumstances change.

Unemployment insurance benefits that provided an extra $600 a week and paid benefits to the self-employed, fully paid 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.

Arkansas Secretary of Commerce Mike Preston said the order allows for states to use traditional jobless benefits payments as the 25% state match required in the order. The match would cost Arkansas at least $265 million, and it’s uncertain if the state could use CARES Act money for the 25% match. That money comes from the Coronavirus Aid, Relief, and Economic Security (CARES) Act approved by Congress to provide aid to individuals, businesses and state and local governments in response to the pandemic.

“We would have exhausted everything that we had available in the CARES funds had we even been able to utilize that. There was still some questions back and forth from the guidance (from the U.S. Treasury.) It seems that most states have been taking this option to allow us to use the existing payments as our match to cover that,” Preston said.

Gov. Hutchinson said disadvantages in going through FEMA are that “it’s going to be weeks away” before the money would be available to eligible Arkansans, and “the federal guidance could change.” He said the application was filed to get Arkansas as close as possible to the front of the line for FEMA approval. Gov. Hutchinson has previously said the better solution would be for Congress to renew some level of jobless benefit funding through mechanisms already in place.

Mervin Jebaraj, economist and director of the Center for Business and Economic Research at the University of Arkansas, has said the $600 extra weekly payment bolstered Arkansas’ economy and tax revenue.

“I think most people underestimate how much the $600 a week boost in UI [unemployment insurance] benefits and the $1,200 checks boosted consumer spending during the pandemic. Low and middle-income folks were responsible for the spending increases and high-income folks were still spending less money than before the pandemic,” Jebaraj said.

The one-time stimulus checks put an estimated $2.128 billion in the hands of Arkansas households.