Colorado to extend state benefits to the unemployed for 13 more weeks

Nearly 22 weeks after Gov. Jared Polis ordered ski resorts to close and triggered the first pandemic job cuts,  the state is revving up another financial relief program for out-of-work Coloradans.

Called the state extended benefits, or SEB, it extends unemployment benefits for 13 weeks and kicks in after regular benefits and federal emergency benefits are exhausted. People who qualify won’t need to make another claim and will be contacted by unemployment officials. 

“Based upon the economic conditions of the state of Colorado, and actually, this has happened nationwide, we have triggered what’s called state extended benefits, or SEB,” said Jeff Fitzgerald, director of unemployment insurance at the Colorado Department of Labor and Employment, during a call with reporters on Thursday.

It’s a dire situation here. Like other states nationwide, Colorado has seen record unemployment during the pandemic, with more than 15,000 people filing for unemployment for the first time last week.

About 280,800 people continue to receive some form of unemployment pay, as of Aug. 1. 

And by early next week, the state’s unemployment trust fund, which is used to pay regular benefits, will run out of money. Colorado will borrow federal money to continue paying everyone on unemployment, but the federal loan must be paid back eventually.

“When insolvency occurs, Colorado will join 10 other states and the Virgin Islands that are already borrowing from the federal unemployment account,” said Ryan Gedney, a senior economist with the state labor department. “… Seven other states have made the loan requests, meaning they expect to borrow.”

So far, he added, other states have borrowed $20 billion. Of that, 85% was paid to people in California, New York and Texas.

In Colorado, the state has paid out $4.5 billion in unemployment benefits, with about two-thirds from federal dollars. That’s expected to increase as a large number of restaurants, bars and tourism-related businesses are unable to fully reopen because of the virus.

Extended benefits

About 7,262 out-of-work Coloradans have exhausted their regular benefits, which last for 26 weeks.

Those people are now getting federal emergency compensation for an extra 13 weeks. Only after that ends will they be moved to the federally-funded SEB program, which combined with the other programs can provide unemployment benefits for up to one year.

Colorado triggered the SEB after its 13-week average unemployment rate hit 6%. It was also one of many programs Colorado used during the Great Recession, when up to 99 weeks of unemployment pay was made available.

All of this is separate from President Donald Trump’s executive order over the weekend to pay people on unemployment an extra $400 a week through Dec. 6.

This Lost Wages Assistance Program would replace the $600 weekly Pandemic Unemployment Compensation that ended July 25 in Colorado.

The president’s plan is to take $44 billion out of the Federal Emergency Management Agency’s Disaster Relief Fund. But there is concern about the order’s legality since only Congress has budget authority.

“He’s proposing we take money out of the hurricane fund just as we are entering hurricane season. That makes absolutely no sense,” state Sen. Chris Hansen, a Denver Democrat, said in an interview earlier this week. “People need help and they need it urgently, which is why (Trump) needs to work with Congress to get this passed.”

The state Department of Labor received federal guidance Wednesday night on how Trump’s order could be rolled out in Colorado.

If the state decides to go for it, the labor department needs two to four weeks to reprogram its computer system in order to provide the new federal benefits.

But it’s up to Polis to apply to FEMA for the funds and only then will the state even know its allotment.

“Colorado has not yet submitted an application for those funds,” said Cher Haavind, deputy director of the Colorado Department of Labor and Employment. “The governor is still considering all of the elements within the program.”

According to the governor’s office, Polis plans to submit the application Friday, said Polis’ spokesman Conor Cahill.

“The governor continues to urge Congress to provide real relief to the Coloradans feeling the impacts of this pandemic,” Cahill added in an email.

Federal funds, however, will only provide $300 of the $400 benefit. Trump wants 25% to come from the states. State Democrats have said Colorado doesn’t have the money to spare.

More Colorado unemployment stories, plus weekly updates on pandemic jobs at The Sun’s “What’s Working” column.

But according to Colorado’s U.S. Sen. Cory Gardner, a Republican, the state can opt out of contributing the $100.

“They don’t have to match it. They could get $300 to those who need it right now,” Gardner told The Colorado Sun on Wednesday. 

Gardner said that the state needs to support people who are unemployed and it needs to do it quickly. 

“On the specifics of the executive order that the president issued, Colorado, I hope, will do that right now,” he said. “I hope that those people who need it will have that as soon as possible.”

As of now, said Gedney with the state department of labor, “we won’t be paying the $100 unless the (governor’s) office can identify other state funds to do so.”

The extra $600 weekly benefit helped hundreds of thousands of Coloradans pay bills so far this year. And there’s no doubt that extending the federal unemployment bonus — even at half the original amount — will put money back into the state’s economy.

“Our estimates on what the $300 per week per claimant would be,” said Fitzgerald, with the department of labor, “that could range between $60 million to $100 million that would be generated and put into the economy for the state of Colorado.”

It would also be retroactive to August 1, he added.

Updated at 5:36 p.m. on Aug. 13: This story was updated to report that the governor’s office plans to submit an application for the $300 in weekly federal unemployment funds made available through President Donald Trump’s executive order.

Colorado Sun reporter Jesse Paul contributed to this story.