PHOENIX (AP and 3TV/CBS 5) - Unemployed Arizona residents who have been getting an extra $300 a week under a Trump administration coronavirus relief program are likely to lose that extra benefit in the coming weeks, the head of the state’s social service agency said Wednesday.
Department of Economic Security Director Michael Wisehart said Arizonans getting the extra pay on top of the regular $240 per week unemployment benefit for the past month will get that cash this week and possibly next. But the pool of federal cash President Donald Trump is tapping could run out after that.
DES is sifting through 2.8 million unemployment claims. Wisehart says that number is suspicious given in a healthy economy there would be 3.4 million Arizonans at work.
“Right now the thing we know for sure is we can pay this week," Wisehart said in a video media briefing. "We have an expectation but no certainty yet that we will be able to pay next week."
Arizona was the first state that signed on to the program Trump announced on Aug. 8 as a stopgap measure while Congress tries to negotiate additional unemployment pay. Recipients who lost jobs during the pandemic had previously been receiving an extra $600 a week, but that program ended at the end of July.
Wisehart said large states like California, Texas and Florida have now been approved for the program and are expected to quickly exhaust money in the Federal Emergency Management Agency fund Trump is using. Unless Congress acts, the extra pay will end suddenly.
The state has distributed more than $8.8 billion in state and federal unemployment aid to more than 1 million Arizona residents.
“It has a huge impact on Arizonans receiving benefits right now,” Wisehart said.
About 392,000 Arizonans are currently receiving unemployment benefits, either for regular jobs they lost after the coronavirus hit in March or self-employed people eligible under a special federal program. That’s up from about 17,500 before the pandemic hit in March and Gov. Doug Ducey began ordering businesses to close to contain the spread of the virus.
ARIZONA'S MONEY IS RUNNING OUT, TOO
The federal pool that is funding the weekly boost isn’t the only fund running out of money. According to Wisehart, Arizona’s unemployment trust fund will become insolvent within eight weeks.
Currently, according to DES data, there is approximately $400 million in the fund. Once that money runs out in two months, the state will be forced to borrow money from the U.S. Dept. of Labor to cover unemployment payments. Arizona businesses will be on the hook to cover the loan.
“You have to pay that money back through taxes on employers going forward, so again from a policy perspective in the state, we continue to have dialogue about the implications of that reality,” Wisehart said.
Wisehart was quick to point out that other states have already borrowed from the feds as a result of record job loss claims during the pandemic.
The last time Arizona’s unemployment fund was depleted, the state imposed a special assessment on businesses to pay back the federal loan.
FRAUDULENT UNEMPLOYMENT CLAIMS
As 3 On Your Side first reported last month, DES is investigating about 1 million unemployment claims for fraud.
Arizona is investigating more than one million unemployment claims for possible fraud, 3 On Your Side has learned.
Wisehart said the state is also reviewing about 30,000 additional reports of possible fraud, many involving identity theft. And he said the losses to taxpayers from claims already paid may be huge.
“I suspect we’re likely in the hundreds of millions in fraudulent payments that went out,” Wisehart said.
Arizona is working through the number of cases that were flagged as potentially fraudulent, and has eliminated about 95,000 claims and paid them in recent weeks. The state has hired more than 1,000 new employees to work unemployment cases or answer phones since the pandemic sent claims skyrocketing.
But it is still being hit with new claims: More than 131,000 people filed for unemployment for the first time last week, even as the state was reopening more businesses.
One Sun City resident says he hasn't seen a penny in more than nine weeks.
“Thinking through where we are in the pandemic, the fact that we got another 131,000 claims last week is troubling,” he said. “Obviously there were people that lost their jobs last week that needed to file.
“But obviously a number are likely to be fraud, so we are continuing to be extremely vigilant on that.”