State laws to get fix for stimulus funds - East Valley Tribune: East Valley Local News

State laws to get fix for stimulus funds

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Posted: Monday, April 20, 2009 5:33 pm | Updated: 12:28 am, Sat Oct 8, 2011.

Republican legislative leaders were pushing ahead with plans Monday to ensure the state and its jobless residents don't lose out on federal stimulus dollars.

Legislation introduced late Monday would repeal a law that requires some who get free health care from the state to prove every six months they remain eligible. The other would alter state labor laws to allow those whose unemployment benefits are about to run out to get an extra 13 weeks of payments, bringing the maximum up to 72 weeks.

Both bills are set for hearings in the House and Senate Commerce committees. The plan is to get the measure to on the governor's desk by the end of the week.

A lot of money is at stake.

Arizona is eligible for $1.7 billion in stimulus cash to help states pay the rising costs of health care for those in poverty.

But the federal stimulus law signed in February by President Barack Obama says states cannot tighten up their eligibility standards of who gets the free care. And that no-cut provision is retroactive to July 1.

In September, a state law took effect requiring people to requalify for the Arizona Health Care Cost Containment System, the state's Medicaid program, every six months. Prior to that, those enrolled could go one year between having to prove eligibility.

Federal officials said that change ran afoul of the no-cut provision and gave the state until June 30 to make the change or forfeit the funding. And the state already has spent about $300 million of that to balance the budget.

SB1102 and HB2631, which are identical, would return Arizona law to what it was before September.

The other bill, SB1322 and its mirror HB2632, would alter Arizona law to allow those whose jobless benefits run out to get an extra 13 weeks of payments, with the cost picked up entirely by the federal government.

Lawmakers and even Gov. Jan Brewer had balked at making the changes, fearing that would forever require Arizona to offer more than the basic 26 weeks of jobless benefits, even after the federal dollars dry up.

State benefits are paid out of a trust fund fueled by a tax all employers pay on the first $7,000 of each worker's salary. Higher benefits or longer eligibility would mean more money coming from that fund - and, ultimately, higher taxes on companies.

Brewer said it appears clear the extended benefits can be repealed once there is no more federal cash.

There already are other programs in place which allow those who cannot find work to get up to 59 weeks of benefits. The balance between that and the state-provided 26 weeks is picked up by the federal government.

Lawmakers and the governor have so far refused to make other changes in state law that would provide the state $150 million in federal stimulus cash to expand who could get unemployment benefits. Those changes would include things like making part-time workers eligible for payments and using a different method of calculating benefits.

But those changes, unlike the 13 weeks of extended benefits, would have to be made permanent for the state to qualify. That means the state - and the unemployment trust fund - would have to absorb the financial burden once the federal dollars ran out.

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