Gov. Kay Ivey on Thursday announced the reallocation of $300 million in federal CARES Act funds to prevent businesses from having to pay exorbitant unemployment insurance tax rates.
The $300 million is to be transferred to the state’s Unemployment Insurance Trust Fund and used to offset “shared costs” which are distributed to tax-paying employers, according to Ivey’s office.
“Since the $1.9 billion in CARES Act funds were allocated to Alabama, I have worked to get those funds into the hands of those Alabamians who need it,” Ivey said in a statement. “My Administration anticipated shifting in the allocation of this money, and we will continue evaluating our options as we move forward. As we are nearing a place where we must devote these funds to ensure that we protect our businesses, especially our small businesses, we acted on this so as to not create a burden for our employers that could result in business closures and layoffs of hard-working Alabamians.”
Alabama Department of Labor Secretary Fitzgerald Washington in a statement said that he agrees with Ivey, that the reallocation is needed to mitigate the impact of increased taxes on state businesses.
“Without this infusion, employers could be facing an unemployment insurance tax increase of more than 500%, which could very well force many businesses to close their doors forever, resulting in even more job losses in Alabama,” Washington said.
Asked what the $300 million had originally been allocated for, Gina Maiola, the governor’s press secretary, responded to APR on Thursday with a list of those previous allocations, which included $25 million for state agencies, $25 million for remote working infrastructure for state government, $43.5 million for “remote instruction and learning,” $75 million for the Alabama Department of Corrections, $48.3 million for “other” and $83.1 million for “Citizens, Businesses, Non‐profit, Faith Based Organizations.”
Without the $300 million transfer, the unemployment insurance tax rates for employers would increase by 508 percent, according to Ivey’s office, and the “shared costs” tax rate would increase from .65 percent to 3.95 percent.
The additional funds are expected to reduce the increase to 200 percent and a new tax rate of 1.95 percent.
Ivey’s office released estimates that show a company employing 20 people with a taxable payroll of $160,000 would see a $5,280 increase in the tax rate if the state weren’t to transfer the $300 million, compared to an increase of $2,080 with the transfer.
“Small businesses are the lifeblood of our state,” said Katie Boyd Britt, Business Council of Alabama’s president, in a statement. “The reallocation of these critical funds is vital in keeping unemployment taxes low, allowing Alabama businesses every opportunity to remain open as they return to business as usual. I commend Governor Ivey for looking out for our state’s small businesses and for taking this important step to ensure our employers are in place to overcome this pandemic and be successful down the road.”
Ivey’s office also announced that beginning Oct. 1, the Alabama Department of Labor will reinstate temporarily waived employer costs associated with COVID-19 related claims.
“Alabama, like nearly every other state in the nation, waived employer costs associated with COVID-19 related claims at the beginning of the pandemic,” Washington said. “This was a needed adjustment in order to ease the burden on employers facing unexpected mass layoffs and industry shutdowns. Now, as employment is rising, and nearly all businesses are open, we will no longer waive those costs.”
New unemployment claims continued dropping last week
There were 8,679 new unemployment claims filed in Alabama last week, slightly fewer than the 8,848 filed the previous week, according to the Alabama Department of Labor.
Of the claims filed between Sept. 13 and Sept. 19, 4,465, or 51 percent, were related to COVID-19. That’s the same percentage as the previous week.
Unemployment benefits could change for some Alabamians
ADOL will begin the review when the current quarter ends on Oct. 3.
Some Alabamians receiving unemployment benefits could see changes in those benefits after the Alabama Department of Labor conducts a required quarterly review and redetermines eligibility, the department said Friday.
The Alabama Department of Labor said in a press release Friday that no action is required by those receiving regular unemployment, Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation.
ADOL will begin the review when the current quarter ends on Oct. 3.
“Some may remain eligible for PUA or PEUC, OR they may be required to change to regular unemployment compensation. Weekly benefit amounts may also change. This depends on eligibility requirements,” ADOL said in the release. “Those claimants whose benefit year ends prior to October 3, 2020, will have their claims reevaluated.”
After the review, if the claimant is determined not to be eligible for regular unemployment compensation, those who qualify may still be able to be paid under PUA or PEUC, and that determination will be made automatically and payment will be issued, the department said in the release.
Claimants must also continue to certify their weeks.
Many claimants are not receiving benefits because they fail to file their weekly certifications, i.e. requests for payment. ADOL cannot pay benefits for weeks that have not been properly certified. Certifications can be done online at labor.alabama.gov or by calling the appropriate number:
- Montgomery – (334) 954-4094
- Birmingham – (205) 458-2282
- Not in Local Area – (800) 752-7389
PUA recipients must file their weekly certifications either by telephone or on the PUA app, at pua.labor.alabama.gov.
Alabama Gulf Coast beaches remain closed for now
Alabama Gov. Kay Ivey announced that beaches will remain closed for now due to ongoing repair and cleanup efforts in the wake of Hurricane Sally.
“Working closely with Gulf Shores Mayor Robert Craft and Orange Beach Mayor Tony Kennon, as well as Commissioner Billy Joe Underwood, the governor has agreed to keep Baldwin County’s beaches closed until Friday, October 2nd,” the governor’s office said in a statement. “This will allow those communities additional time to get their beaches ready for public enjoyment in a safe, responsible manner.”
Mobile County beaches might open earlier than that.
“Likewise, the governor has been in touch with Mayor Jeff Collier, and she is prepared to amend the beach closure order for Mobile County when he signals that Dauphin Island is ready to reopen their beaches,” the governor’s office said in a statement. “At the present time, all Alabama beaches remain closed until further notice.”
Hurricane Sally came ashore near Gulf Shores on Sept. 16 as a category two hurricane with 105 mile per hour winds. Numerous homes, businesses and farms have been destroyed and many more have seen serious damage.
“As of Wednesday night, approx. 37,000 cubic yards of Hurricane Sally debris (equivalent to roughly 1,700 truck loads worth) has been picked up in Orange Beach since Sunday (4 days),” the city of Orange Beach announced. “Kudos to our debris contractor CrowderGulf.”
“I spent Sunday afternoon meeting with senior staff and I believe we will need some time to get our buildings safe for children to return,” said Baldwin County Schools Superintendent Eddie Taylor in a letter to parents. “We live in a very large county. Power may be on in your area and your school may not have any damage, but we cannot open schools unless all schools can open. Our pacing guides, state testing, meal and accountability requirements are based on the system, not individual schools.”
“We have schools without power and for which we do not expect power until later this week,” Taylor said. “In this new age, we need internet and communications which are currently down so we cannot run any system tests. We have physical damage at our schools including some with standing water, collapsed ceilings and blown out windows. We have debris on our properties and debris blocking our transportation teams from picking up students. All of this must be resolved before we can successfully re-open.”
“If everything goes as planned, I expect we will welcome back students on Wednesday, September 30,” Taylor said. “Prior to returning students to school, we will hold two teacher work days to get our classrooms and our lessons plans back on track.”
SNAP replacement benefits coming to three counties hit by Hurricane Sally
Thousands of SNAP recipients in Mobile, Baldwin and Escambia counties are set to receive automatic replacement benefits as a result of Hurricane Sally, the Alabama Department of Human Resources announced Thursday.
Recipients who received their benefits Sept. 1 through Sept. 16 will receive a replacement of 50 percent of their regular monthly benefit. Those who received supplemental pandemic maximum allotment payments will receive a replacement of 30 percent of those benefits.
The U.S. Department of Agriculture Food and Nutrition Service approved the replacement benefits today at the request of DHR. The benefits are intended to replace food purchased with SNAP that was lost to widespread power outages caused when Hurricane Sally made landfall on Sept. 16.
“Our priority is to remove the very real threat of hunger for the many Alabamians who are struggling from the devastation of Hurricane Sally,” said Alabama DHR Commissioner Nancy Buckner. “The first step toward that goal is to replace the food that so many Alabamians lost to the storm. We are actively working to obtain additional resources to provide much-needed relief for the region as it recovers.”
Hurricane Sally caused over 265,000 households to lose power for at least four hours in Mobile, Baldwin and Escambia counties, where approximately 54,000 households will receive SNAP benefits totaling an estimated $8.5 million.
Those recipients should expect to see the replacement benefits automatically loaded onto their EBT cards next week.
The Food Assistance Division of DHR administers the SNAP program in Alabama.
More information about the program can be found at dhr.alabama.gov/food-assistance.