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DWD: Lawmakers cost the state $25 million by waiting to pass relief package

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MADISON (WKOW) -- The state's workforce agency said Thursday that inaction by state lawmakers cost Wisconsin $25 million that could have gone toward unemployment relief for laid-off workers.

The Department of Workforce Development said it had urged the Republican-led state legislature to act in March to waive the one-week waiting period for unemployment benefits. Legislative leaders said at the time, they wanted to wait for Congress to pass a federal relief measure and use the state's response to build on the federal aid.

Congress approved the $2 trillion relief bill during the last week of March. The state legislature did not approve its own relief package, which included waiving the waiting period, until two weeks later.

"The state is missing out on those two weeks of one-week waiting period funds from the federal government and so it's approximately $25 million that the state missed out on on federal funds," said Ben Jedd, Communications Director for the Wisconsin Department of Workforce Development.

Republican lawmakers on Thursday held multiple press events calling on Governor Tony Evers to further relax his "safer at home" order and allow more businesses to open. The state supreme court is still deliberating a lawsuit brought by Republican lawmakers arguing the Evers administration does not have the authority to extend the emergency measure.

"We have to have economic activity," said Rep. Scott Allen (R - Waukesha.) "The state revenue sources are sales tax and income tax. Those are the primary sources of revenue. Well if retail outlets are shut down, there is no sales tax and if people are off work, there is no income tax."

Allen said reopening the state's economy is a necessary risk as the DWD said Thursday it projects to run out of unemployment insurance funds in October at the current pace of 300,000 claims per week. Allen rejected the idea of the legislature acting to provide money to the DWD should it get close to exhausting its funds.

"I'm kind of reminded about what they say about socialism," Allen said. "Socialism is always a great idea until they run out of other peoples' money. When we shut down the economy, we run out resources."

Jedd said the DWD's projection does not take into account taxes the agency has yet to collect from businesses that have laid off workers. He said DWD would seek to borrow money in the event it does drain the unemployment insurance fund.

"If this continues and we keep going down that road, we would be able to take out a loan from the federal government as we did during the Great Recession," Jedd said. "We would continue to pay unemployment benefits."

A. J. Bayatpour

Reporter, WKOW 27

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