AUGUSTA — A state document shows Maine is considering opting out of an emergency unemployment program after its funding was hit in federal budget cuts earlier this year.

The federally funded, state-run program, the Emergency Unemployment Compensation Program, which provides benefits to certain unemployed people for up to 37 weeks after traditional benefits end in Maine, serves approximately 5,500 people currently in the state, said Laura Boyett, director of the Maine Department of Labor’s Bureau of Unemployment Compensation.

A reference sheet from the White House earlier this year said that with the federal cuts, Mainers in the program would have benefits cut by just under 11 percent, while long-term unemployed people in the program would lose more than $450 on average in benefits.

But according to a federal guidance document issued to states in March, that cut is based on a March 31 implementation date, which Maine hasn’t met. The longer states wait, the deeper cuts to benefits would have to be. For example, if a state waits until June 30 to implement benefit cuts, it would have to slash them by more than 22 percent.

Boyett said the state is reviewing “all options that might be available” to adjust for it.

But in a March email, obtained by the Portland Press Herald in a public-records request, Boyett wrote to an employee that she was putting together an analysis for Labor Commissioner Jeanne Paquette and Gov. Paul LePage’s office “to make the decision about opting out” of the program.

“Although it makes the most practical sense, it will be a nightmare from a public relations and potentially, (l)egislative perspective,” Boyett wrote.

In a brief interview Wednesday afternoon, Boyett declined comment and left the phone after she was asked why opting out might make the most sense.

Adam Fisher, a public information officer for the department, picked up the phone and said, “We’ll have to call you back.” Nobody from the department called back Wednesday, but Julie Rabinowitz, a department spokeswoman, answered certain questions by email.

However, all signs point to the potential costs of transitioning state systems to handle the change, which was triggered by sequestration, automatic federal budget cuts that began taking effect March 1. Rabinowitz said the cost of implementation will be a factor in the department’s decision.

Rich Hobbie, director of the National Association of State Workforce Agencies, an organization of state administrators of unemployment insurance laws, said uncertainty about the availability of those extra funds has many states thinking that eliminating the program could be better than spending the money to transition it.

In a March letter, the association sent a letter of members of Congress saying due to a historic lack of federal funding, most state workforce agencies are running antiquated computer systems — some 25 years old or older — that aren’t easily changed to reduce claimant benefits.

“It comes down to the difficulty of reprogramming the system, the time it takes to reprogram the system and the cost,” he said. “It’s not clear yet that the federal government will be able to cover the full cost of the necessary changes in most states.”

Hobbie said 10 states are undecided on whether or not they will continue operating the emergency program. He couldn’t say which states those were, but Maine is conceivably one.

As for Boyett’s suggestion that eliminating benefits could face legislative opposition, Assistant Senate Majority Leader Troy Jackson, D-Allagash, said Wednesday he was concerned about its potential effect.

“It seems to me it’ll have a mass effect of throwing a bunch of people with no other option except depressed wages and jobs that they’re probably more qualified for than what they should have to have,” Jackson said.

Michael Shepherd can be contacted at 370-7652 or at:
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