The Feds are offering Virginia $125 million to help the unemployed who seriously need the help.
Accepting it is a no brainer, right?
Well, not to some elected officials and most of the business community who see it differently and argue that Virginia should “just say no.”
What??
House Minority Leader Ward Armstrong seemed incredulous: “I don’t see how you turn your back on $100 million.”
But it is not that simple. Like so many aspects of public policy, the decisions are portrayed as black and white when there are shades of gray that make them more complicated. Sound bites substitute for analysis.
Receiving federal money usually comes with mandates attached and this is no exception. To receive the money, Virginia must select and implement two of four expansions to its unemployment compensation program. Any change selected expands eligibility and thus costs that when the federal money terminates, as it will in two years, must be born by taxes on Virginia businesses.
The issue then is not just whether to accept the money. It is do we accept the money and relinquish state control of Virginia’s unemployment compensation program and allow a part of it to be dictated by Washington? Not just while the money flows, but afterwards when it must be funded entirely by taxes paid by Virginia employers.
Federalism is an immensely important feature of America’s governmental structure. It has been steadily eroded over time as more and more decisions are made in D.C. and fewer and fewer in state capitols. Thus, the capacity for states to be innovative, to be fifty experimental laboratories where efforts to solve seemingly intractable problems can be tried and tested based on specific population needs, has likewise diminished. Our ability to learn from others’ mistakes and benefit by tailoring their successes to our needs diminishes when programs come with a one- size-fits all uniformity.
Historically, each state designs its unemployment compensation program to fit the needs of workers and businesses within its borders. This paradigm recognizes that what is good policy in Oklahoma might not be as prudent in South Carolina or Maine. Therefore, states should not be required to grant permanent federal control over unemployment compensation programs in exchange for short-term assistance, even though the help is surely needed.
So do we just say no? Do we take the money and trade a short term benefit and give up another piece of state prerogatives?
It seems a compromise is in order-dare we say “bipartisanship!!”
The feds should assure states that they can sunset these changes to terminate when federal stimulus dollars run out in two years. Decisions can then be made by each state on the ongoing design of its program based on current circumstances within that state. This would enable states to accept the money now, help those who really need help, do their part in pulling this country out of its financial abyss, but maintain the ability to control eligibility criteria for its citizens going forward as they have always done.
But my understanding is that this clarity is lacking. States cannot be confident without clarification that these federal mandates won’t continue after the money to support them dries up. Rather it seems that the Administration and the Congress want to hijack state control of unemployment programs and use the economic crisis to do it.
They display a Washington- knows- best mentality to the detriment of state discretion. Okay, it’s Washington’s money– or rather the national deficit–so where the nation’s money is involved, they can tell Virginia how to use it.
But this “dog won’t hunt” as the saying goes, once the nation stops paying the bill. Then it is Virginia’s money, our program and we should decide its particulars.
This money is needed now for Virginians out of work. Changing our eligibility rules by accepting two of the four additions to those currently eligible is fine during this time of financial crisis while we are using federal money.
But the answer to Delegate Armstrong’s question is yes, Virginia should turn its back on $100 million, if it comes with permanent erosion of state prerogatives and increased federal control over Virginia’s unemployment compensation program that Virginia businesses will soon be expected to pay for. Then Virginia should decide how much our businesses pay, the impact of those payments on job creation, and the level of benefits that should be paid, and to whom.
Unless the Administration and Congress, both under Democratic control, make it clear that Virginia can make these changes with a sunset provision terminating them when the federal money runs out, Virginia, and by the way, several other states, are right to just say no.
Wyatt Durrette is a Director at DurretteBradshaw, PLC (www.durrettebradshaw.com) and co-founder of the XDL Group. He served three terms in the House of Delegates and was the Republican candidate for Governor in 1985.
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