AZDES director says unemployment fund could run out of cash this fall

Sep 3, 2020, 4:35 AM | Updated: 1:00 pm
(Pexels Photo)...
(Pexels Photo)
(Pexels Photo)

PHOENIX — For those that are out of work due to the coronavirus pandemic, Arizona Department of Economic Security director Michael Wisehart says to rush to apply for unemployment insurance before it runs out.

Arizona’s Unemployment Insurance Trust Fund has dropped 60% from $1.1 billion to $400 million during the pandemic.

“We’re spending about $50 million per week from it, so we’ve got about eight weeks or so of solvency left,” Wisehart said.

He also believes FEMA’s federal benefit of $300 per week could run out in two weeks.

Arizona could borrow money from the Department of Labor in Washington D.C., but that money has to be paid back on taxes through employers, Wisehart cautioned.

Congress has no plans for new federal benefits past the $44 billion from FEMA that several states are sharing.

In a webinar on Wednesday, Wisehart told reporters Arizona is applying for an extension for whatever money could be left.

“Unfortunately, we will not have a long lead time of notification when the benefits begin to expire,” Wisehart said. He’ll turn to news media and social media to warn recipients.

Some 392,000 Arizonans are currently receiving up to $540 a week between state and federal unemployment benefits, up from about 17,500 before the pandemic hit in March.

In that time, Wisehart believes hundreds of millions of dollars may have gone to fraudsters. He blamed the rush to aid unemployed Arizonans without having the manpower to do background checks. His department relied on attestations from applicants.

Last week, his department worked through backlogs and rejected fraudulent cases to clear another 5,000 Arizonans for help. Wisehart says it can now better crack down on fraud.

“We’ve hired over 1,000 people,” he said. “We continue to work with privatized vendors in order to bring additional human capital resources to bear in this space.”

Wisehart says his staff will labor on Labor Day to process unemployment claims and field fraud claims.

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AZDES director says unemployment fund could run out of cash this fall