State's math on jobless doesn't add up

“We still stand by our analysis,” Butler said. “We’re not trying to pull the wool over anybody’s eyes.”

The law cuts the maximum period during which a person can collect state-financed benefits from 26 weeks to 20 weeks or less (the number will rise and fall with the unemployment rate). Earlier this year, state labor officials told legislators that change would save the state an estimated $160 million in the first year.

But the savings were calculated using the number of people who have historically qualified for more than 20 weeks of benefits, not the number who actually received them. It's a major difference: The number fluctuates from year to year, but over the past year, only about one-third of recipients who qualified for benefits beyond 20 weeks actually collected them.

Some got jobs before they hit the 21-week mark. Others were disqualified because they broke program rules. Some just gave up their job search and their benefits.

Overall, about half of Georgia's recipients collect during the full number of weeks they qualify for, according to Clare Richie, a senior policy analyst with the Georgia Budget and Policy Institute, a progressive-leaning think tank that analyzed the new law's impact on workers.

On average, Georgians who get state unemployment benefits collect for 13.3 weeks, according to the state Labor Department.

By overlooking such realities, "the state's methodology may have yielded an expectation of savings that will be hard to meet," said Katherine Willoughby, a professor of public management and policy at the Andrew Young School of Policy Studies at Georgia State. “This one calculation of savings perhaps presents it in its rosiest scenario.”

Butler emphasized that all the figures are estimates, and that in the real world, a variety of factors can fluctuate in ways that could either accelerate or delay repaying the loan.

For instance, if the economy improves faster than expected, people will return to work faster and use fewer weeks of benefits. That will both save the state money and increase revenue from employers who pay into the unemployment trust fund.

If the economy worsens, more people will apply for unemployment and, arguably, draw benefits for a longer time, resulting in more benefits paid out and less revenue coming in.

Butler also noted that the state's projections assume that every worker who previously would have qualified for more than 20 weeks will now collect for the maximum number of weeks, whatever it is at the time. In fact, some probably won't, so the state could pay out less in benefits than the state's estimates assume.

Still, the questions raised by the AJC concerned advocates and policy analysts.

"A fiscal analysis should have been done when the law was being considered, so these questions could have been asked," Richie said. "We didn't have good fiscal analysis to look at."

Kyle Jackson, director of the Georgia branch of the National Federation of Independent Business, said that if businesses get socked with additional penalties, the state's economy will suffer. "Anytime you raise the costs of hiring, people do less of it," he said.

During the recession, Georgia depleted its unemployment trust fund and borrowed $700 million from the federal government in order to keep paying benefits. To speed repayment of that debt, legislators passed the law that will take effect July 1. Although it only affects people who start collecting benefits after that, it has already spurred fears, controversy and confusion.

Here's what the law does:

For jobless workers, the maximum benefit period will now be from 14 to 20 weeks, depending on the state's unemployment rate: The higher the rate, the longer the maximum benefit period. At the current unemployment rate of 8.9 percent, announced Thursday, the maximum will be 19 weeks.

For employers, the law increases the amount of unemployment tax they pay per worker. The calculation is based on a formula that measures the size of the employer's workforce and the number of former workers who've collected unemployment.

Nearly one-third of employers will see the minimum increase of about 40 cents per worker per year. At the other end of the spectrum, some employers will see the maximum hike of about $81 per worker per year.

The bigger burden for many employers will be imposed by the federal government rather than the state. This year, Washington levied a $21-per-worker fee to speed repayment of Georgia's loan. Until the loan is fully paid off, an additional $21-per-employee charge will be tacked on each year -- $42 in year two, $63 in year three, and so forth.

Richie, of the Georgia Budget and Policy Institute, stressed that regardless of how many workers are affected by reducing the maximum benefit period, the change will make many Georgians' lives harder.

"They are still Georgians laid off for no fault of their own," she said.

She noted that the change comes on the heels of cutbacks by the federal government, which pays extended benefits to many workers whose state benefits have run out. In April, about 15,000 Georgians lost up to 20 weeks of federal benefits.

Tonya Pinkston was among them. The sudden loss sent the 38-year-old south Fulton woman into a financial tailspin. She had spent months trolling for work, sending out about 75 resumes. She eventually brought her disabled mother and father into her home, and they help with the finances as she takes care of them.

"I'm out of money," she said during a phone conversation Tuesday morning, as she was driving to the Fulton labor office to look for work.

Sure enough, she got a lead on a job opening. By the end of the day, following a job interview, she was offered a position. She'll be dispatching wheelchairs and other means of passenger assistance at Hartsfield-Jackson International Airport.

"Next week I start orientation," she said.