California Could Create Its Own Coronavirus Unemployment Benefit

As the COVID-19 pandemic continues to hurt California’s economy, state lawmakers are weighing whether to provide a supplemental unemployment benefit with the additional $ 600 per week provided by the federal government due this month.

Assemblyman Phil Ting (D-San Francisco), leader of a legislative task force, said there is support among Democratic lawmakers to provide up to $ 600 a week to unemployed Californians if Congress does not act to extend the benefit of the pandemic federal.

“There are so many people who depend on that money to pay the rent and buy food. I think the state has to do everything possible to help them pay their bills, “said Ting, chairman of the Assembly Budget Committee.

With the federal supplement ending on July 25, state unemployment checks will return to the weekly average of $ 340 unless the state or federal government restores the supplemental benefits.

The money for any extended benefits would be borrowed from a federal trust fund that has already covered the state’s costs of paying unemployment benefits to millions of Californians who lost their jobs after the state ordered residents to stay home in March for stop the spread of the virus. .

California has borrowed $ 6.5 billion from the federal trust fund to pay an unprecedented number of claims filed since March. The state borrowed $ 10.7 billion to pay unemployment benefits during the Great Recession a decade ago and only ended up paying the money back in 2018 by raising taxes on employers.

Ting and 25 other members of the state Senate and Assembly, acting in task forces, raised the issue as part of a $ 100 billion joint stimulus plan that aims to protect Californians and stimulate job creation. A summary of the plan includes a proposal to “borrow from the federal government to strengthen state unemployment insurance programs.”

The proposed stimulus plan will be provided to Governor Gavin Newsom and an economic recovery task force created to address the effects of the pandemic-fueled recession in the state.

“Millions of Californians are suffering in this economic downturn, and Republicans in Washington, DC don’t seem to mind,” said Assembly Speaker Anthony Rendon (DLakewood) said that when the stimulus plan was launched.

Gov. Gavin Newsom’s representatives did not respond Tuesday to requests for comment on whether he would support the state providing supplemental unemployment benefits. Newsom said Friday that he hopes House of Representatives Speaker Nancy Pelosi will convene Congress to provide more financial aid to unemployed Californians.

“I have deep confidence in your ability to accomplish something important, to accomplish something that directly addresses the problem not only of unemployment insurance, but of getting checks in the pockets of those who have been affected by COVID-19,” Newsom said.

On Monday, Republicans in the United States Senate proposed a package that would cut the improved federal unemployment payments from $ 600 a week to $ 200 after some lawmakers argued that the higher payments provided many low-wage workers more money than they had received while working, providing a disincentive to return to work.

The proposal to cut the supplement to $ 200 would create financial hardship for many low-income families in California, according to a study published Tuesday by the California Policy Laboratory at UCLA.

The Republican Senate proposal is now subject to negotiations with House Democrats, who have proposed an extension of the $ 600 unemployment benefit.

California would not have to provide supplemental funds if the federal government reinstates the $ 600 payments, Ting said, but said the state should step in if there is no help from Washington.

“We know that that money has been critical enough to keep the number of evictions lower than we had imagined,” said Ting. “The last thing we should do is compound our homeless problem. We don’t need thousands more Californians on our streets today. ”

Money borrowed from the federal unemployment trust fund is returned with higher taxes to employers in the coming years.

Supplemental money approved by Congress meant that the average weekly benefit for Californians increased to $ 940 as of April, while those who received the maximum weekly state benefits saw an increase of $ 1,050.

So far, California has paid about $ 50 billion in unemployment benefits since March, after processing 8.7 million claims for unemployed Californians.

The increase in unemployment benefits would occur even when lawmakers from both major parties have criticized the operations of the state agency that approves claims and pays unemployment benefits.

Republican State Senate Leader Shannon Grove of Bakersfield on Tuesday criticized Democratic lawmakers for canceling a committee meeting that would have allowed lawmakers to order an audit of the state’s Employment Development Department.

The audit was proposed in response to complaints from unemployed Californians who have been unable to file claims for unemployment benefits due to blocked state phone lines and computer failures.

“California Democrats took the opportunity to audit the EDD, which would have helped millions of frustrated Californians,” Grove said. “This audit would have been an opportunity to get responses.”