The law shortens the period during which a person can get state-financed benefits from 26 weeks to 20 weeks or less. State labor officials told legislators earlier this year that the change would save about $160 million the first year. The money is needed to pay back $700 million borrowed from the federal government.
Georgia Labor Commissioner Mark Butler said the agency remains confident in its projections, which show that reduced benefits and more taxes on employers will erase the debt in two years.
“We still stand by our analysis,” Butler said. “We’re not trying to pull the wool over anybody’s eyes.”
But the Journal-Constitution reports that the savings were calculated using the number of people who have qualified for more than 20 weeks of benefits, rather than the number who actually got them. That number changes each year, but in the past year only about a third of people who qualified for benefits beyond 20 weeks actually collected them.
Some got new jobs before they got to the 21st week. Others broke program rules and were disqualified. And some just gave up their search and benefits.
About 50 percent of the state’s recipients collect benefits for all the weeks they qualify for, said Clare Richie, a senior policy analyst with the Georgia Budget and Policy Institute, a progressive-leaning think tank that analyzed the new law’s impact on workers.
The state Labor Departments says people who get state unemployment benefits collect for 13.3 weeks on
By overlooking such realities, “the state’s methodology may have yielded an expectation of savings that will be hard to meet,” said Katherine Willoughby, a professor of public management and policy at the Andrew Young School of Policy Studies at Georgia State. “This one calculation of savings perhaps presents it in its rosiest
The labor commissioner noted that all the figures are estimates and said there are numerous factors that could speed up or slow down the repayment of the federal loan, including the condition of the economy and the level of unemployment in the state.
Butler also said the state’s estimates assume that workers who previously would have qualified for more than 20 weeks will now take the maximum number of weeks, whatever it is at the time. But it’s possible some won’t so the state could pay out less in benefits than its projections assume.
Georgia depleted its unemployment trust fund during the recession and had to borrow $700 million from the federal government to keep paying benefits. Lawmakers seeking to repay that debt faster passed the new law, which takes effect July 1.
Here’s what the law does:
• For jobless workers, the benefit period will now be a maximum of 14 to 20 weeks, depending on the state’s unemployment rate. The higher the rate, the longer the maximum benefit period.
• For employers, the law raises the amount of unemployment tax they pay per worker. The calculation is based on a formula that measures the size of the employer’s workforce and the number of former workers who have collected unemployment benefits.