Take the money

Imagine the federal government offering California more than $2.5 billion to help its unemployed workers. You’d think that lawmakers would leap at the money, especially with the unemployment rate climbing to 10.5% in February. And yet when the Assembly took up a bill last week to make the state eligible for the aid, resistance from Republicans left the measure one vote short of the two-thirds majority needed for speedy passage. Proponents plan to bring a new version of ABX3 23 to the Assembly today, and lawmakers shouldn’t hesitate to pass it.

The federal stimulus package that Congress approved in February included about $40 billion for increases in unemployment benefits. The lion’s share -- $27 billion -- would fund emergency aid to those who exhaust their current benefits (up to 53 weeks’ worth in this state, more than half of it financed by federal taxpayers). To enable its workers to receive an extra 20 weeks of federally funded aid, though, California would have to change the way it measures its unemployment rate. Under state law, the extended benefits would flow only when the rate for workers eligible for benefits -- a category that excludes the self-employed, among other groups -- tops 5%. The state hasn’t met that threshold since 1983. By contrast, it would be eligible for the aid today if it considered the overall unemployment rate for three consecutive months, as allowed by federal law. That threshold is 6.5%, which California has exceeded since April 2008.

Providing more money for unemployment benefits is widely viewed as an effective way to stimulate the economy, because the dollars are much more likely to be spent than banked. The National Employment Law Project estimates that every $1 in benefits yields $2.15 worth of economic growth. That’s one reason Gov. Arnold Schwarzenegger, the California Chamber of Commerce and labor lobbyists all say they want the state to take advantage of the federal offer for extended aid. And it’s important to act quickly, because an estimated 168,000 unemployed Californians are due to exhaust their benefits in the next few weeks.

The main sticking point over ABX3 23 was the possibility that the state -- or rather, employers located here -- might be left holding the bag for $900 million in extended unemployment benefits after the federal aid runs out in June 2010. Backers of the bill disagreed, but its sponsor, Assemblyman Joe Coto (D-San Jose), has been working with state officials to eliminate any potential ambiguity. With the state’s unemployment insurance fund on the edge of insolvency, the concern about the cutoff date makes sense. But that’s no excuse to stall this crucial bill, not when so many people need the help.