Lansing — The Whitmer administration applied Tuesday for an additional federal unemployment payment of $300 per person but rejected a Trump administration option to offer a $100 per person state match.
Michigan will not add another $100 to the supplemental payment from the Federal Emergency Management Agency for wages lost because of the coronavirus pandemic. Instead, the existing $362-per-person state unemployment payment from Michigan’s Unemployment Trust Fund will be considered to constitute the required 25%, or $100, match for an average total of $662 per person.
The extra $300 federal payment will benefit about 910,000 eligible residents, according to Gov. Gretchen Whitmer’s office.
In early August, President Donald Trump issued an executive order that would replace the extra $600 federal unemployment payment authorized under a prior coronavirus stimulus package with the $300 payment and a $100 match from states. The state said Tuesday it was authorized to pull that $100 from the $362 it would otherwise pay claimants from the Unemployment Trust Fund.
Most states have chosen to use existing state unemployment payments to match the federal supplemental payment, arguing they lack the extra $100 per person suggested for the 25% match, according to the Associated Press. Others are still trying to decide which course of action to take.
If Michigan were to attempt to pay the $100 match with any other funding, the state would not have “enough uncommitted Coronavirus Relief funds to pay even a single week,” Whitmer spokeswoman Tiffany Brown said.
“The ‘cost sharing’ option provided by the White House has a cost to Michigan of $90-$100 million per week,” Brown said. “The president’s order forbids states from using the UI Trust Fund to pay these benefits, which means that the state would have to find hundreds of millions of dollars and exacerbate a large budget shortfall.”
Michigan’s Unemployment Trust Fund rested at $1.7 billion as of Aug. 11, down from $4.6 billion at the start of the pandemic.
When the trust fund dipped below $2.5 billion in late June, it triggered an increase in unemployment contributions that employers across the state will have to absorb in the next calendar year. The cap increased from $9,000 to $9,500.
People eligible for the federal payment starting Aug. 1 will be paid retroactively, with no clear end date for the extra federal funding.
“This program will provide some much-needed support for families that are struggling to put food on the table or pay their bills, but it’s a short-term Band-Aid that falls short of what’s needed,” Whitmer said in a Tuesday statement.
U.S. Rep. Paul Mitchell, R-Dryden, criticized Whitmer for not providing the additional $100 as Democrats have called on the federal government to continue the $600 a week benefit during the pandemic.
The Democratic governor, who is co-chair of Democratic presidential nominee Joe Biden’s campaign, has lobbied for the resumption of the federal $600 COVID-19 jobless aid at press conferences as well as money to bail out the state government from its $3.2 billion shortfall for this budget year and $3 billion deficit next year.
Whitmer could have used some of $3.5 billion in previously provided COVID-19 relief money to help offer the extra $100 a week, Mitchell said.
“Apparently, it’s only urgent if the federal government pays the whole freight,” he said.
Michigan and other states are facing Depression-level unemployment and jobless residents are sorely in need of the cash, said Patrick Anderson, an East Lansing-based economist and former deputy budget director under Republican former Gov. John Engler. But the way the payment came about leads state and federal governments further into constitutional “gray areas,” he said.
“The Trump administration’s repositioning of funds, much like the Whitmer administration’s repeated uses of executive orders, is something with serious constitutional questions attached to it,” Anderson said. “However, the money is there from the federal government, and we have people in Michigan who need it so we should make use of it.”
Unemployment filings in Michigan dropped last week to the lowest weekly total since the start of the coronavirus pandemic. The state reported 14,462 new claims during the week ending Aug. 8. That’s down from a high of 388,554 claims during the first week of April. But it’s still a nearly 240% increase from the same week last year, when less than 4,300 claims were filed.
The Michigan League for Public Policy had hoped for a new federal relief package that extended the $600 federal jobless aid payment and remains concerned that Trump’s executive order preempted congressional negotiations that could have been more financially fruitful, league spokesman Alex Rossman said.
Short of that, however, the league is pleased Whitmer is taking what money was available, said Rossman, who didn’t criticize the governor for failing to produce the extra $100.
“We definitely would have preferred a solution that did not require any state matching funds,” he said. “But with that said, the governor was only given a limited number of options to work within those parameters.
“We’re all playing the hand we were dealt right now.”
The federal government’s jobless aid offer is not enough in the long term, Whitmer said in her statement Tuesday.
“A robust congressional recovery package that meets the scale of this crisis is what’s needed to help individuals who have lost work as a result of the pandemic get through this unprecedented time,” she said.
Until the state receives a response from FEMA, “Michigan workers are advised to continue their bi-weekly certifications as they normally would and do not need to contact the UIA or make changes to their MiWAM account to receive these additional funds,” said Steve Gray, director for the Unemployment Insurance Agency.
FEMA already has approved Arizona, Iowa, Louisiana, New Mexico, Colorado, Missouri and Utah to receive the extra compensation.
Staff Writer Craig Mauger contributed.