S.C. forgoes $100M in jobless benefits

By Yvonne Wenger - The (Charleston) Post and Courier

COLUMBIA -- South Carolina is missing out on nearly $100 million more in federal stimulus dollars for unemployment benefits, but it will be months before out-of-work residents see the money, if they ever do.

Congress tried to entice the states to update the 1930s-era social welfare program by including $7 billion in the American Reinvestment and Recovery Act. The money is intended to cover more women and part-time and low-wage workers who currently don't qualify for unemployment checks. In South Carolina, the changes could provide nearly 17,000 more jobless residents with benefits.

But South Carolina legislators aren't prepared to change the rules that were drawn up at a time when the workplace was more traditional.

House Majority Leader Kenny Bingham, a Cayce Republican, said it hardly makes sense to add more people to the dole that already is running a projected $1 billion deficit, money that state businesses will have to pay back at some point.

On the flip side, legislators such as Rep. Joe Neal, a Hopkins Democrat, argue for civility and fairness. Employers make contributions for every worker on the payroll to the fund that pays out unemployment benefits, he noted.

“This is not a giveaway,” Neal said. “These people have earned this protection. Hundreds of thousands of folk have lost their job through no fault of their own.”

The Legislature could have made the necessary changes to get the money while it reconvened last month in a special two-day session to fix an oversight that had blocked other unemployment benefits, but lawmakers wouldn't agree to do so, despite Neal's urging.

Bingham pledged recently that all the changes necessary to collect the additional federal cash will be up for consideration when the Legislature meets in January. The House is expected to take up legislation to overhaul the Employment Security Commission.

The commission has been under fire for its performance during the economic turmoil. It runs the unemployment trust fund, which has been broke since last year. The state has been borrowing money from the federal government to cut the unemployment checks.

How to get the money

Maurice Emsellem, policy co-director at the New York-based National Employment Law Project, said the state would have to change its law to get the money.

The Legislature would have to alter the way individuals' earnings are calculated in order to open up benefits to more of the unemployed who were earning the lowest salaries, Emsellem said.

He said lawmakers also would chose between providing benefits to two of four groups of people: part-time workers, those who leave work for a compelling family reason such as domestic violence or to care for an ill loved one, workers who need more training to get a job and people with dependants who would get an extra $15 a week in their checks.

The advocacy group projected that the $97.5 million available to South Carolina in the stimulus package would provide benefits for 16,665 unemployed residents for four years, Emsellem said.

The additional benefits, covered by the federal cash, would cost an estimated $23.9 million each year.

After four years, the money would run out and the state would have to either repeal the law changes or start paying to provide the extra benefits. If South Carolina does not use the money, it remains in federal coffers, Emsellem said.

States have until October 2011 to apply for the cash.