Georgia Unemployment Reform Is Latest Florida-Inspired Law

Georgia Unemployment Based On Shoddy Data

Florida might be a bad influence on Georgia.

For the second time in a year, Republicans in the Georgia General Assembly have imitated their neighbors in the Sunshine State. Also for the second time, promises that folding up the safety net would save money have proven shaky.

"We have had consistent legislative proposals that promise quick wins and easy fixes for complicated problems, and they're bolstered by bad numbers," State House Minority Leader Stacey Abrams (D-Atlanta), said in an interview.

Georgia Gov. Nathan Deal (R) signed Republican-sponsored bills into law earlier this year -- one that would force welfare applicants to pass drug tests and another that would sharply reduce the duration of unemployment insurance for laid off workers. Both laws were modeled on measures recently taken in Florida.

The goal of the unemployment law, which also modestly raised business payroll taxes, was to help the state pay back the federal government for money borrowed to keep unemployment benefits flowing. But it turns out the reform might save less than expected, the Atlanta Journal-Constitution reported last week. The Georgia Department of Labor assumed that the law -- which capped the duration of state-funded benefits at 20 weeks instead of 26 -- would save the state $160 million in its first year.

"But the savings were calculated using the number of people who have historically qualified for more than 20 weeks of benefits, not the number who actually received them," the Journal-Constitution's Craig Schneider wrote. "It's a major difference: The number fluctuates from year to year, but over the past year, only about one-third of recipients who qualified for benefits beyond 20 weeks actually collected them."

The Georgia Department of Labor insists that the Journal-Constitution is wrong. In response to the story, a department spokesman sent The Huffington Post data showing that 121,723 people were eligible for more than 20 weeks of benefits during a one-year period ending in March. Following federal guidelines that encourage states to use the number of potential weeks of benefits to compute the "maximum potential current liability," the department used the 121,723 figure to estimate how much money the state could save by not paying those weeks of benefits to those claimants.

The department said that during that yearlong period, 42,414 people actually received final payments after week 20. That figure is the basis for the Journal-Constitution conclusion that only one-third of qualified recipients actually collect benefits during the weeks Georgia Republicans have taken away.

Jeffrey Wenger, an associate professor of public policy and unemployment insurance expert at the University of Georgia, said the state is wrong to figure savings based on the maximum potential weeks of benefits.

"It is not a reasonable accounting practice nor forecasting practice to take the maximum liability you could potentially receive as the real cost savings," Wenger said. "No one in a business who was in charge of revenue forecasting would ever do this."

Clare Richie, a senior policy analyst with the progressive Georgia Budget and Policy Institute, said that the department's estimate is within the realm of theoretical possibility. Her main concern is that the law is unfair, and that stakeholders were not provided enough information during the legislative process.

"The unemployed are already giving by having stingy benefits," Richie said. "This law appears to put more burden on the unemployed after more than a decade of business tax breaks for unemployment insurance."

Both Richie and Georgia Labor Commissioner Mark Butler blame tax breaks dating back to the administration of Democratic Gov. Roy Barnes, who served until 2003, for the $700 million shortfall in the state's unemployment trust fund.

The other bill Georgia officials claimed would save money requires welfare applicants to pass drug tests. When he signed it, Gov. Nathan Deal said in a statement that when Florida passed a similar law, it decreased the Sunshine State's welfare applicant pool by 48 percent and saved the state $1.8 million.

Those numbers, however, were based on bad research by a conservative Florida think tank, which had presented its questionable Florida findings to the Georgia General Assembly in February. According to Florida's Department of Children and Families, which administers the state's welfare program, the drug testing law didn't reduce the welfare applicant pool or save any money.

Georgia State Rep. Jason Spencer (R-Woodbine), who has touted the research supporting drug tests for welfare applicants, asked to see the Florida findings when questioned by a reporter. He did not respond after receiving the documents.

Georgia Democrats pointed out during the legislative process that the drug testing law might not save money. They also pointed out that federal courts might find it unconstitutional, which is what happened in Florida. And it turned out that Florida's welfare recipients were actually less likely than the general population to be using drugs.

"We are copying the wrong things," Georgia House Minority Leader Stacey Abrams said. "Instead of creating jobs, we are trying to find distractions from responsibility with the war on the poor. That drug testing bill was designed to scapegoat a community that has never demonstrated a higher propensity for drug use than anyone else."

Go To Homepage

Before You Go

Popular in the Community