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Oklahoma Could Be Improperly Utilizing $70 Million From FEMA Misplaced Wages Help Unemployment Program



[Update at 12:10pm: In a press release issued today after the publication of this article, the Oklahoma Employment Security Commission (OESC) announced that Oklahoma is pausing its distribution of the remaining Lost Wages Assistance (LWA) funding. “We are in communication with FEMA and our federal partners to determine the next steps forward for the remaining funding. As of right now, we are holding the distribution of additional LWA funds,” Executive Director Shelley Zumwalt said in a new statement. “Based on the guidance we received about these federal packages, there is a possibility that distributing remaining LWA funds could be seen as an overpayment that would have to be recalled and returned. We do not want to put Oklahomans in this position, so OESC will hold on starting to process these payments until we have a definite answer about the future of LWA funds.”]

Oklahoma just lately created the Extra Misplaced Wages Help (ALWA) program and is planning to ship a one-time $400 fee to 120,000 Oklahomans beginning in the present day, December 16. Nonetheless, the Sooner State could also be overstepping its authority by planning to fund the brand new program with cash leftover from the $302 million allocation it acquired from FEMA as a part of the unique Misplaced Wages Help (LWA) initiative.

The issue?

FEMA pointers explicitly prohibit states from utilizing LWA funds past the unique six-week allotment and FEMA informed me it didn’t authorize extra funds or particular funds to the state of Oklahoma. Sadly, the Oklahoma Employment Safety Fee could have given false hope to many residents who’re affected by the devastating monetary results of the coronavirus pandemic.

Misplaced Wages Help Program

Hundreds of thousands of unemployed People have been stored afloat throughout the coronavirus pandemic because of the creation of a $600 weekly federal unemployment profit included within the CARES Act. The profit expired on the finish of July and was one of many foremost sources of friction as Democrats and Republicans initially negotiated the following coronavirus stimulus bundle. The Misplaced Wages Help (LWA) program was created by President Trump in early August to “ease the financial burden for these battling misplaced wages as a result of coronavirus (COVID-19) pandemic,” in accordance a FEMA spokesperson. Trump approved FEMA to allocate as much as $44 billion from the Catastrophe Aid Fund (DRF) for states to pay $300 every week to eligible unemployed residents (states had the choice to contribute a further $100 every week of their very own cash)

As a result of the DRF had a set pool of cash, and to make sure fairness amongst states, FEMA allotted a most of six weeks of funding to every state that had utilized. FEMA said that it could use knowledge “from the Division of Labor, in addition to state, territory or District of Columbia knowledge acquired on purposes to undertaking the general funding distributions.” Precisely estimating funding was arduous given many transferring variables, however FEMA carried out pointers to account for any variance and stop states from having an incentive to inflate their projections. “Any extra funding acquired from FEMA that isn’t utilized for the six weeks of help approved should be returned to FEMA,” a FEMA spokesperson mentioned. “States and territories could not use the funding to pay claimants for some other weeks of help (past the weeks ending Aug. 1, 2020 by means of Sept. 5, 2020) or for an quantity past the $300 federal contribution authorised.” That is in step with what FEMA had published in public pointers.

Oklahoma’s Shocking $400 Announcement

Oklahoma acquired $302 million from FEMA to fund six weeks of LWA funds; nonetheless, its forecast was off by 23 p.c and it solely ended up utilizing roughly $230 million. In accordance with FEMA’s pointers, the surplus cash ought to, due to this fact, be returned and Oklahoma isn’t allowed for use for different functions. This made a current announcement from the Oklahoma Employment Safety Fee (OESC) shocking.

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In a December 10 press release, OESC mentioned that it was utilizing the leftover FEMA funding to create a brand new program, Extra Misplaced Wages Help (ALWA), and distribute a one-time $400 fee to roughly 120,000 Oklahomans between December 16 and 21. “The funding for the ALWA program comes from federal FEMA {dollars} that we’re required to make use of earlier than the tip of the yr or it would expire. This funding isn’t one thing that OESC can allocate to some other program,” mentioned OESC Govt Director Shelley Zumwalt.

Ms. Zumwalt is right that the funding can’t be allotted to some other program, however she could have jumped the gun by making use of the funding to the ALWA initiative itself given FEMA’s strict pointers. Some local news outlets claimed that “OESC mentioned they’ve acquired particular permission from FEMA to distribute what’s left of their misplaced wage help funds.” The Related Press reported an analogous story. Nonetheless, OESC’s press launch merely said that it “will use remaining federal funding for unemployment help by means of FEMA,” with out mentioning whether or not it had mentioned this with FEMA or acquired an exception.

FEMA says this merely isn’t true. “FEMA didn’t authorize extra funds or particular fee preparations to the state of Oklahoma,” a spokesperson informed me yesterday by e-mail.

Comprehensible Confusion About The Misplaced Wages Help Program

There was lots of confusion in regards to the LWA program from the beginning, together with whether or not states have been required to make incremental contributions to obtain federal funding. White Home officers supplied a number of, various interpretations within the days after Trump’s announcement. “By Tuesday night [after the announcement], a minimum of 5 contradictory variations of this parallel profit system had been communicated by numerous Trump officers, based on a working tally from Georgetown legislation professor David Tremendous,” noted Catherine Rampbell of The Washington Publish.

Nonetheless, a number of weeks in, the Division of Labor supplied readability on how the Misplaced Wages Help program would work and FEMA detailed guidance to states in regards to the timeline, software, funding, approval, and reporting necessities. The steerage is well-written, however dense and 17-pages lengthy. It’s unclear if Oklahoma reviewed it previous to saying the ALWA program, however the state seems to be improperly utilizing funds in a means that violates FEMA guidelines.

Points Of Equity

The 120,000 Oklahomans who would profit from the ALWA program are probably struggling to deal with the monetary results of the pandemic. Whereas the variety of unemployed Oklahomans is itself staggering, it additionally hides particular person tales like Tamekia Colbert’s, which she shared in The Oklahoman. Colbert, who’s unemployed and caring for her paraplegic son, has been counting on pandemic emergency unemployment compensation (PEUC), which is about to run out in a number of weeks. She has been searching for work-from-home jobs to keep away from exposing her son to Covid-19, however has nonetheless seen payments pile up.

Colbert and different residents undoubtedly deserve assist and the OESC was certainly looking for a artistic solution to unlock extra assist for Oklahomans. As Ms. Zumwalt of the OESC said on Twitter, “we all know this has been a tough yr for Oklahomans, and we hope the distribution of those remaining federal funds will additional assist these in want.

Nonetheless, for each story in Oklahoma, there’s a related story in Kentucky, Connecticut, New Mexico, and each different state. Residents in these states deserve help too and it raises applicable questions of equity if Oklahoma unilaterally goes past its six week LWA allotment whereas different states usually are not empowered and funded to do the identical.

The Upshot

The OESC announcement places FEMA in a tough spot, probably forcing it to play unhealthy cop. Requested on Tuesday if FEMA was taking motion to reclaim the $70 million in LWA funds from Oklahoma, a spokesperson mentioned solely that “FEMA is working with the state of Oklahoma now.” We should wait and see how that is resolved, however OESC could have to back-track on its untimely announcement in regards to the $400 fee or discover a state funding supply to pay for the ALWA program that doesn’t depend on FEMA’s LWA allocation.

Or maybe Congress may merely go laws that would offer stimulus cash to residents of all 50 states.

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