Deputy Labor secretary says stimulus conditions not binding

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Mar 20, 2009 - Page: 1A

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The U.S. Department of Labor says Louisiana is under no obligation to return “stimulus” dollars if it revamps and then repeals state unemployment law to qualify for the money.

In a letter released Thursday, Deputy Assistant Labor Secretary Douglas F. Small told U.S. Sen. Mary Landrieu, D-La., that the state has flexibility, although he noted that Congress clearly wants states to expand unemployment eligibility.

“While states are free to change or repeal the provisions … Congress and the Department rely on states’ good faith,” Small wrote.

State Sen. Eric LaFleur, D-Ville Platte, said the letter dispels the governor’s argument that accepting the $98.4 million would forever expand unemployment eligibility in Louisiana and eventually lead to higher taxes for businesses.

“For me, it was clear as a bell,” LaFleur said. “For some reason, whatever they were hearing verbally was different from what I was reading in the law.”

Landrieu, LaFleur and union leaders have been critical of the governor’s rejection of the money.

However, the governor said Thursday he still is concerned that the lingering effects of the “stimulus” dollars would lead to higher taxes.

“We’re not going to take temporary dollars if it causes an increase in taxes,” he said.

The $98.4 million at stake stems from a part of the federal “stimulus” package designed to encourage states to modernize the way unemployment benefits eligibility is calculated.

To qualify for unemployment in the state, Louisiana Workforce Commission spokesman Curt Eysink said:

• Workers need employment in at least two of the four quarters in the 12-month base period.
• They need to have earned at least $1,200 in the base period.
• Their total wages in the base period need to be at least 1.5 times their earnings in their highest quarter of wages.

However, Louisiana excludes the most recent three to six months of employment in determining eligibility for benefits. This lag time is said to date back to the pre-computer age when employment information was not as readily available.

The federal government wants states to eliminate some of that lag time, a change that would help roughly 4,000 people in Louisiana.