Fed $$$ providing lifeline to jobless, officials say

Boston, Mass. - The state has paid out nearly $883 million in extended compensation to unemployed residents since March 1, aides to Gov. Deval Patrick said Wednesday, a massive increase over the prior six-month period.

Also, between March 22 and Sept. 30, according to Patrick administration officials, the state has shelled out over $162 million in extended benefits for people out of work, and more than $182 million in additional compensation at a rate of a $25 per week in supplemental benefits.

Enabled by the $787 billion American Recovery and Reinvestment Act, the benefits have acted as a lifeline for Massachusetts residents who have lost their jobs, lawmakers and Patrick aides said.

Unemployment in Massachusetts last month reached 9.1 percent, with fresh figures due Thursday.

A federal subsidy for COBRA, which provides health benefits for the unemployed, allows out-of-work residents to pay 7 percent of total health care premiums.

“We’re talking about real money directly to real families here,” said Rep. David Linsky, House chair of the Joint Committee on Federal Stimulus Oversight.

Jeffrey Simon, the state’s infrastructure investment director, said the state’s eventual harvest from the federal stimulus act, including competitive grants, tax and bond benefits, could hit roughly $17 billion.

Between direct funding for state and local governments and recovery and reinvestment monies earmarked for individuals and non-governmental organizations, Massachusetts is receiving $17.7 billion in funding through the American Recovery and Reinvestment Act, according to a report released Wednesday by the Massachusetts Budget and Policy Center.

So far, $2.5 billion has been received by residents in the form of tax reductions, Pell Grants, unemployment benefits and other programs, while about $1.8 billion has gone to state government, according to the report.

Budget analysts say the funding has been vital in propping up state services, but warn that without a second, massive stimulus, the state will face a “cliff effect” in fiscal 2012 when that pool of federal aid runs dry.

In addition to the health care and weekly cash benefits, Washington has provided a federal tax exemption on the first $2,400 of benefits and 100 percent funding of federal-state extended benefits.

From Aug. 19, 2008 to Feb. 28, 2009, the state paid nearly $468 million through extended unemployment compensation. While the March-September window runs roughly three weeks longer, the overall increase between the two roughly similar time periods tops 88 percent.

According to the Mass. Budget and Policy Center report, the number of unemployment insurance claimants in Massachusetts has spiked 67 percent. The federal benefits benefit roughly 133,000 Bay State residents claiming unemployment benefits, the left-leaning think tank said.

Labor and Workforce Development Secretary Suzanne Bump said the state was waiting for Congress to pass an unemployment benefits extension bill.

Bump said the state has applied for more stimulus funds for “green job” labor market improvements and long-term health care, and is preparing to apply for funding for the clean energy sector.

Sen. Marc Pacheco, the committee co-chair, took exception with the administration’s failure to produce grants and spending data.

“Somebody’s telling me we can’t print that out somewhere … I find that hard to believe,” Pacheco told Bump.

Patrick aides sought to reassure lawmakers that looming reporting deadlines would unearth the information.

State governments have until Oct. 20 to finalize detailed reports to the federal Office of Management and Budget, with federal review and request for responses due by Oct. 30, and an OMB report thereafter.

“You certainly are a veteran of enough things that have gone wrong in state government,” Bump told Pacheco, then added, after audible reactions in the hearing room, “Not suggesting you were the cause.”