Thousands of out-of-work South Carolinians will miss out on five months of unemployment checks because state officials failed to tweak a rule enabling them to tap into federal stimulus money.
The state's high jobless rate - one of the country's worst at 11.5 percent - means some unemployed residents should be receiving an additional 20 weeks of checks when they run out of their current state and federal benefits.
But to get access to the money, state lawmakers needed to pass temporary changes to the economic index used to trigger additional emergency benefits in times of unprecedented financial hardship.
No bill was ever proposed.
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More than 113,000 unemployed South Carolinians have exhausted their benefits. The Palmetto State is one of two states eligible for the most generous benefits, but isn't receiving them. The other is Mississippi.
"South Carolina missed the boat on free federal benefits that were available to its residents at virtually no cost to its populous," said Andrew Stettner of the New York-based National Employment Law Project.
A fiscal analysis from the office of U.S. Rep. John Spratt Jr., D-S.C., put the loss at tens of millions of dollars.
"I was outraged," Spratt said.
Roosevelt "Ted" Halley, the state Employment Security Commission's outgoing executive director, said his office knew about the changes after receiving information from the U.S. Labor Department, but he did not discuss it with state legislators, saying the information was in the original 1,200-page federal stimulus bill.
Officials at the Columbia-based Appleseed Legal Justice Center, an advocacy group for the poor, also met with key lawmakers about making the change but couldn't find a sponsor amid Gov. Mark Sanford's debate over the stimulus and the legislative session's approaching end.
One lawmaker acknowledged he misunderstood the bill's provisions, thinking it could increase the state's unemployment fund debt.
The federal funds do not need to be repaid.
"In these cash-strapped times, why would we leave one dime in Washington?" said Sue Berkowitz, Appleseed Legal's director.
State officials disagreed this week over whether legislators still could pass a measure to get the 20-week benefits before the end of the year. Doing so would require a special session.
Following mass layoffs and worsening economic conditions, Congress made money available temporarily through the $787 billion stimulus package that would extend unemployment benefits in states with the highest jobless rates.
To get the funds, state lawmakers would have to pass a rule that temporarily changes the measure they use to trigger emergency jobless benefits, which states give out during times of high unemployment. States that made the changes agreed to deploy emergency checks to residents after their employment rate hit a certain level.
But South Carolina's emergency funds - an additional 13 weeks of benefits - are given out differently. Officials start deploying the funds based on a certain percentage of unemployed residents who are drawing benefits during the initial 26-week period. That number increased in March, triggering the extra funds.
That percentage figure has fallen recently as unemployed residents exhaust their benefits and are no longer counted.
"It's not because the economy's improving. It's not because people are finding jobs," said Don Schunk, a research economist with Coastal Carolina University. "It's because we have a record number of people exhausting their benefits and disappearing from the system."
The last checks through that emergency program are scheduled to go out Saturday, immediately affecting about 6,900 residents.
Meanwhile, that data error won't affect the other 23 states that followed the stimulus bill's requirements and made changes so that emergency benefits are based on the statewide unemployment rate, not the percentage of people drawing checks.
Simply put, those states will likely continue drawing emergency benefits, which have now expired for South Carolina.
Though state lawmakers needed to OK the index change to get the funding, few apparently knew about it.
Shortly after the stimulus act passed, the state employment agency received an informational packet about how state legislators could access the money.
Halley and other commission members met frequently with state lawmakers this spring to discuss the state's insolvent unemployment benefits fund. Halley said he didn't expect the state's 13-week emergency trigger to fall so soon into the recession.
"Nobody could foresee the future," said Halley.
Agency Commissioner Becky Richardson called the failure to notify state lawmakers "inexcusable."
"Obviously, it was never brought to our attention as commissioners," she said. "We definitely would have taken it to the Legislature. Why would you not?"
Sanford, whose office doesn't have direct oversight of the commission, is working on reforms to the agency. On Wednesday, his office released a statement saying, "a lack of accountability has affected the ESC's ability to best perform its mission."
When Appleseed Legal Justice staffers met with state lawmakers about the bill, the issue seemed to get lost among other problems state lawmakers faced, such as budget shortfalls and the overall effort to reform the employment security commission.
"There was so much going on," said Sen. Nikki Setzler, D-West Columbia.
Rep. Bill Sandifer, R-Seneca, chairman of the labor committee, said he mistakenly thought the state would have to continue paying the benefits after the federal program runs out, adding more debt to employment benefit fund. But state officials have no obligation to continue offering the benefits.
"I know I didn't know that, and I'm sure my staff didn't know as well because they keep me informed of what's going on. ... We were simply not informed," he said. "I don't know whose responsibility it was to inform us, but nevertheless, it was not done."
Staffers in Spratt's office who were researching other employment benefit-related legislation first noticed the mistake.
"I was astounded," Spratt said Thursday. "I thought that surely reason would prevail and compassion would prevail for those people who now need the assistance."