Tilley: The Business Owner Says

Editor’s Note: Michael Tilley with our content partner, The City Wire, uses his weekly editorial to convey his thoughts on the recent discovery that Arkansas may have overpaid unemployment benefits by as much as $161 million. If you are offended by a few curse words, no need to read further.

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This week came the news that Arkansas officials overpaid an estimated $161 million in unemployment benefits during the past three years. In the most recent fiscal year, Arkansas overpaid $50.3 million, or 12% of the total benefits paid.

Not that it makes it any less offensive, but Arkansas’ overpayments were a small part of $19 billion in overpayments among all 50 states during the past three years. For $19 billion, we could have built Interstate 49 between Alma and Texarkana. Three times. Maybe four.

The journalist in me has battled with my other position as owner and co-owner of two small businesses. The journalist wanted to responsibly address the issue; you know, explain the process, get quotes from officials in charge and attempt to follow the journalism model of laying out both sides of the issue for Kind Reader. The journalist wanted to explain how the unemployment benefits are federal dollars merely passed through the Arkansas Department of Workforce Services to provide unemployment benefits to out-of-work Arkansans.

The business owner wanted to drive to Little Rock and ask one simple question with a somewhat similar follow-up question: “What the fu$%? I mean, really, what the fu$% already?!?!”

Mr. Journalist wanted to pen a clever essay about how this is part of a larger problem in which a centralized bureaucracy is no longer able to administer unemployment programs; and maybe it’s time for the states to develop unique and innovative approaches to providing unemployment benefits.

The business owner in me, who remembered the curt letter recently received from the Arkansas Department of Finance & Administration because we miscalculated our tax payment by $9, could only muster one simple word to capture his unbelief with the whole situation: Bullshit.

At some point in the process of self-reflection, the journalist could find no reasonable argument with which to adequately retort to the frustrated business owner.

Bullshit, it is.

And it might not be so bad — although maybe it would — if officials with Arkansas’ Department of Workforce Services would have attempted to push out a statement noting their concern with the issue: something like, “Holy crap, $161 million! That’s a bad deal and we are going to do all we can to remove the chance for error. Hell, we might even suspend payments for a few weeks to readjust our process. This is unacceptable and we’re going to do all we can to get to the bottom of it.”

But they didn’t do that. Instead, they put out a cold officialdom statement about acceptable error percentages (which, by the way, is 9.88%) and statistical analysis and a qualifier about a possible date discrepancy between the Department of Labor and media reports. They even attempted to use the we’ve-been-pretty-damn-busy-what-with-this-recession-and-all excuse by reminding reporters that the errors happened “in the midst of a recession” when Arkansas “experienced high volume of unemployment insurance claims.”

Bullshit.

What if you or me tried that excuse with a state or federal agency, especially a tax-collection agency? Dear Tax Collector: “Hey, I was pretty busy last week with a couple of big issues that were of important to the future of my company, and was unable to get that tax payment to you. We’ll get you a check next week. It may be off 9.88% of what we really owe, but somewhere we read about that being an acceptable percentage error.”

Any guesses on how that would fly with Captain Bureaucrat? I’d guess I’d get a government letter like my little company received Aug. 3: “Your business has failed for two months or more to file its Excise or Withholding Wage Tax returns or failed to pay the Excise or Withholding Tax due. Any additional occurrences within a 24 month period will result in the closure of your business.”

The last two lines were underlined in the letter, an emphasis added possibly to remind me of who was wearing the boot and who had their neck under the boot. It turns out in this incident that half of the problem was the state had not yet processed our payment, and half the problem was that we miscalculated by the aforementioned $9. Which is to say that government officials are much more dedicated to the collection of taxes than they are to the doling out of taxes. Which is to say one government agency can track me down and demand immediate satisfaction for $9, but another agency can’t be bothered to fully explain how they erroneously spent $161 million.

Apparently, the folks who work hard every day to run a business and attempt to create jobs and pay taxes are held to a much higher standard than those who can’t or won’t get a job. Or, to provide a more richer and certainly more crass point, if you own a business and are working to improve your position in life and create jobs, expect a constant ass-probe from a small army of state and federal bureaucrats.

Bullshit, it is.

Michael Tilley is the editor of The City Wire. He can be reached by e-mail at [email protected].