State of Hawaii

Federal funds
to help state labor

The Legislature must authorize
their use to fund unemployment
benefit extensions

By Janis L. Magin
Associated Press

Hawaii will receive $30.8 million to pay for extended unemployment benefits as part of $8 billion the federal government is distributing to states from excess funds, but the state will not be able to spend it without authorization from the Legislature, an official said yesterday.

Under the economic stimulus package signed Saturday by President Bush, regular 26-week unemployment benefits can be extended by 13 weeks. The president said the package would help to spur business investment and create jobs six months after the Sept. 11 attacks.

"Even though it's a gift and we have the money, we wouldn't be able to spend it without authorization from the Legislature," said Tom Jackson, spokesman for the state Department of Labor & Industrial Relations.

State labor officials, who only learned of the windfall yesterday afternoon, plan to attach language to an existing bill during this session to authorize spending, he said.

The U.S. Department of Labor determined each state's share of the $8 billion by looking at each state's share of federal unemployment taxes collected in 2000.

"The distribution comes at a time when many state trust funds have been reduced by the recession, and will help mitigate the impact," U.S. Labor Secretary Elaine Chao said yesterday.

"These funds will also be more productive now, as they will be in position to help grow state economies."

Hawaii's unemployment rate rose sharply following the Sept. 11 terrorist attacks, which devastated the state's tourism industry and caused massive layoffs.

The highest numbers were in the last week in September, when 5,337 people statewide filed for unemployment.

The number of people applying for benefits last month was, on average, about 80 percent higher than in February of last year, according to state figures.

Last week, 1,836 people statewide applied for benefits, a 44.6 percent increase over the same period the year before. Most of those were on Oahu.

"They're high, but they're lower than what they were," Jackson said. "It's been dropping slowly."

The $30.8 million from the federal government will help build up the state's unemployment trust fund, which pays the benefits, Jackson said.

That will help businesses that pay into the fund by helping to offset an increase in the unemployment assessment that was postponed from January because of Sept. 11.

"This puts money back in the trust fund," he said.

The maximum unemployment benefit in Hawaii is $395 per week, Jackson said. There are no plans to use the federal money to increase that figure, he said.

State of Hawaii

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