UNEMPLOYMENT
Extended federal benefits will fall 12.2% the week of April 28 as a result of government spending cuts
By KATE BRAMSON JOURNAL STAFF WRITER
PROVIDENCE — As many as 8,000 Rhode Islanders collecting extended unemployment benefits will lose 12.2 percent of their weekly checks beginning the week of April 28 because of federal sequestration, the Rhode Island Department of Labor and Training announced Tuesday.
That amounts to an average reduction of $46 per week for each claimant receiving federal benefits — or an estimated loss of $1.5 million in federal benefits paid out in a month, according to the DLT. On average, a current weekly unemployment benefit check for people collecting the extended federal benefits totals $377. At the Economic Progress Institute, which advocates for policies affecting the poor and low income, Executive Director Kate Brewster said such cuts –– which equal $184 a month for an unemployed resident –– are “quite significant.”
“And it’s not only going to be harmful to unemployed Rhode Island households, who will find it much more difficult to make ends meet,” Brewster said, “but it will also surely be a drag on our struggling economy.”
She said the $1.5 million being cut means people will have fewer dollars to spend. “I just really think that this is the last thing that Rhode Island’s economy and its people need to experience,” Brewster said.
Federal sequestration, triggered when Congress failed to reach consensus on reducing the nation’s deficit, requires automatic, across-the-board federal budget cuts. It affects federal spending, including unemployment insurance benefits.
Back in February, DLT Director Charles J. Fogarty expected that sequestration could result in a 10-percent cut in unemployment benefits for nearly 8,000 Rhode Islanders.
In all, benefits available for Rhode Islanders will still be cut by 10 percent over the length of the sequestration — from when it began, on March 1, until the end of the federal fiscal year, DLT spokeswoman Laura Hart said. However, states had a window of time in which they could implement the cuts, and the rate of individual cuts was adjusted higher based on the later start time for the reductions.
These cuts do not affect Rhode Islanders receiving regular state unemployment benefits, which cover the first 26 weeks of unemployment claims.
Rhode Islanders out of work longer than 26 weeks are eligible for an additional 47 weeks of benefits paid with federal money. It’s those benefits that are affected by sequestration.
With an unemployment rate of 9.4 percent for February, the latest figures available, Rhode Island was tied with North Carolina for the nation’s fifth-highest unemployment rate. That’s better than where it was the month before –– tied with California for the worst rate in the nation. Nevada, California and Mississippi are now tied for the worst rate –– 9.6 percent.
For the week of March 23, the Rhode Island DLT received 28,000 claims for unemployment benefits, which includes state benefits and the extended federal benefits, according to the DLT.
The DLT says it will notify unemployment-benefits claimants about the cuts to their weekly checks — this week by mail and with an automated telephone message the week of April 21.
The DLT also anticipates an additional10-percent cut — perhaps $500,000 — in the Workforce Investment Act funding Rhode Island receives from the federal government, Hart said. That could mean less money available for employee-training programs, she said. kbramson@providencejournal.com