NY Governor Paterson, Labor Secretary Solis Announce Additional Help For Unemployed New Yorkers

$137 Million in Federal Stimulus Funds Will Go to Help New York Modernize the Unemployment System

May 14, 2009 -- New York Governor David A. Paterson and U.S. Secretary of Labor Hilda L. Solis today announced that New York State will receive $137 million from the American Recovery and Reinvestment Act (ARRA) to modernize the State’s unemployment system.

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The funding represents the culmination of months-long effort by Governor Paterson, as he led a coalition of governors who called on the federal government to include increased unemployment insurance funding in the ARRA legislation.

The bulk of the funding – approximately $120 million – will be used to provide Unemployment Insurance benefits for unemployed workers, while the remainder of the funding will provide additional staffing at the Department of Labor’s unemployment call centers and will utilize technology to improve the Unemployment Insurance system as a whole.

“Unemployment in New York State is the highest it has been in decades. We have an obligation in government to do everything in our power to assist New Yorkers during this unprecedented economic crisis. I have made this a priority of my Administration,” said Governor Paterson. “New York is a nationwide leader in building a modern unemployment insurance program that responds to the needs of unemployed workers and their families. We are pleased that the federal government recognizes this, and that this influx in federal dollars is supporting these efforts. I also want to thank New York’s congressional delegation on their outstanding work to make this a reality.”

“We congratulate New York on building a modern unemployment insurance program that recognizes the realities of today’s workplace,” Secretary Solis said. “We understand that the resources of New York and many other states are being stretched thin as a result of this continuing recession, and we are pleased to be able to help with these grant monies.”

The inclusion of the Unemployment Insurance Modernization Act in the ARRA legislation succeeded in large part due to Governor Paterson’s national leadership and advocacy for unemployed workers. Last October, the Governor sent a letter to both Presidential candidates, urging them to make the Unemployment Modernization Act a top priority. In November, Governor Paterson led a coalition of 18 governors who demanded that the House and Senate leadership include the Unemployment Insurance Modernization Act as part of the ARRA legislation. Following these efforts, in December, he wrote to President-elect Obama and Vice President-elect Biden, highlighting the need to adopt Unemployment Insurance Modernization in any future stimulus package.

In addition to the funding announced today, Governor Paterson introduced legislation last month (Governor’s Program Bill No. 8; S.4110-A/A.8273) to allow New York to access an additional $645 million in ARRA funds for Unemployment Insurance. That legislation would allow New York State workers to receive federally-funded extended benefits worth an estimated $370 million, and would make amendments to New York's eligibility standards to ensure that New York meets the conditions for an additional $275 million for Unemployment Insurance modernization.

U.S. Senator Charles E. Schumer said: “I applaud Governor Paterson and Secretary Solis for taking this bold step to modernize New York’s unemployment system. This is exactly what Congress had in mind when we passed the Obama Economic Recovery package earlier this year. During this economic crisis, we must to give New Yorkers who have lost jobs through no fault of their own the assistance they need to get back on their feet.”

Congressman Charles B. Rangel said: “We are sending funds to states that have committed to modernizing their unemployment insurance systems and to improving access for workers who have lost their jobs through no fault of their own. Governor Paterson was a key ally in our effort to provide these funds, which will now help unemployed workers in New York. Additional unemployment funds will come to our State upon the enactment of some very modest reforms.”

Senator George Onorato, Chair of the Senate Committee on Labor, said: “Unemployment benefits for some 56,000 jobless New York residents are slated to begin running out next week, with at least 5,000 more a week after that. Passage of this program bill will provide unemployed New Yorkers with critically needed financial assistance during very difficult economic times. This is a win-win for unemployed workers in need of aid, as well as for local economies that will benefit from the money these New Yorkers will spend on food, rent and other basic needs in their communities.”

Assemblywoman Susan John, Chair of the Assembly Labor Committee said: “I want to thank the Governor for his national leadership on this critically important issue. The hard working staff at our Department of Labor has worked tirelessly to meet the increased demand on our unemployment insurance system. From the calls to my office, I know that despite those efforts many New Yorkers are facing delays in receiving their benefits. Today’s cash infusion from Washington will provide critical support to our burdened system and will improve claims processing. On behalf of all families in New York, I would like to thank both the Governor and our New York Congressional Delegation.”

New York State Department of Labor Commissioner M. Patricia Smith said: “For nearly a year, Governor Paterson has been fighting for these funds for unemployed New Yorkers, and this additional funding represents the strong partnership between U.S. Department of Labor and New York State. These funds will help the State Department of Labor to continue to support the unemployed and their families while they either look for work or attend training courses.”

Unemployment Insurance benefits are paid from New York’s Unemployment Insurance Trust fund, which is funded by employer contributions. This fund has been in deficit since January as a record number of New Yorkers have and continue to file for unemployment benefits. As a result, New York has been forced to borrow from the federal government to replenish the fund; money that eventually will need to be repaid by employer payments. A portion of the funding announced today will be used to reduce that borrowing, reducing the future burden on employers.

New York qualified for the funding because State law allows the use of an “alternate base period” in determining if workers qualify for unemployment insurance benefits. In states that allow this, about 40 percent of workers who originally did not qualify are able to receive benefits when the alternate base period is used to determine their eligibility.

For more information, please visit www.labor.ny.gov.

Source: New York Governor