Ducey promised $300 million in 'return-to-work bonuses.' Arizonans only got $23 million.
Arizona canceled federal unemployment benefits in favor of bonuses meant to entice people to go back to work. It’s unclear what happens with all the unused money.
We first wrote about Gov. Doug Ducey’s flailing back-to-work bonus program two months ago, when the payouts amounted to a pittance. Now that the application deadline passed, the program hasn’t improved much — there’s hundreds of millions of dollars left over.
Ducey’s signature return-to-work bonus program — which pays up to $2,000 per person and was hailed by his allies and paid spokespeople as “the most sound back to work policies in the country!” — had only paid out $422,000, or about 0.15% of the promised $300 million in funding, as of September.
But Ducey’s office argued back then that while the window to have gotten a job had closed, the application period had not, and perhaps applications would skyrocket before the November 15 deadline.
“I think it's premature to call it a failure,” Ducey’s spokesman said at the time.
Well, November 15 has come and gone. So we checked back in.
More than 26,000 people have applied for a bonus. The state has paid less than half of them, spending about $23 million on bonuses for 11,500 people, though payouts are ongoing. Even if every person who applied ultimately qualifies, the state would only spend about $52 million, or about 17% of the total allotted.
“You’re looking at whether or not the program is a success,” Ducey spokesman C.J. Karamargin said this week. “We look at the program as a means to an end. And how we get to that end is less important than achieving the goal that we want, which is getting Arizonans back to work. And we are very pleased with where we are.”
So what happens to the remaining $277 million that went unspent?
Karamargin said the money will be reallocated to ensure the “maximum benefit to Arizonans” though he didn’t know where specifically the money would go. The money Ducey pledged for return-to-work bonuses came from the American Rescue Plan Act of 2021, which contains strings on how it can be spent.
Shortly after we published that story in September, DES made it easier to get the funds.
The department changed the rules so every person who qualified would receive the full $2,000 bonus, regardless of if they worked full-time or part-time. (Previously part-time employees were only eligible for $1,000 bonuses.) The department even handed out back-bonuses, paying part-time workers who initially received a $1,000 bonus another $1,000.
Besides upping the pay for part-time workers, DES cut the amount of time it required workers to remain employed to eight weeks, rather than 10, and expanded the types of jobs that qualified to include self-employed and gig workers.
Finally, DES administration upped the pay cap. Previously, those who earned $52,000 or more were barred from receiving the bonuses. After our story, the department set the cap at $77,000.
Clearly, the department was trying to spend the money. And plenty of Arizonans were eligible.
Nearly a quarter-million Arizonans were receiving unemployment benefits during the weeks of May 8 or May 15, the key timeframe during which people had to be on unemployment to qualify for the bonus if they went back to work full- or part-time. Arizona has recovered all the jobs lost since the height of the pandemic.
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Other states struggled to pay out, too
Arizona was one of 10 states that offered some form of return-to-work bonus, most of which were Republican-led states that also slashed federal unemployment benefits, the Huffington Post reported.
None are doing a great job spending the money — with the exception of Colorado, which integrated its bonus request system into the existing unemployment system and didn’t require ongoing documentation that a person kept a job. The simplicity of that program stands in stark contrast to the byzantine process of applying for Arizona unemployment and return-to-work benefits.
After Montana’s return-to-work program petered out, policymakers redirected some of the funds to help recruit out-of-state nurses.
Matt Darling, an employment policy fellow at the Washington D.C. based think tank Niskanen Center, wrote in The Hill that while the programs failed to deliver funds, especially compared to the guaranteed benefits of $300 per week in federal unemployment insurance that many states cut, they did succeed at giving governors a political win when they cut unemployment benefits.
“By announcing the programs simultaneously, it seemed as though governors were replacing one program to provide aid to people who were currently unemployed with another. In truth, they were replacing a program that had been effective at supporting people with an empty promise,” Darling wrote.
When Ducey announced in May that he was cutting Arizonans off from the federal government’s additional $300 per week in pandemic-related unemployment insurance, he promised several other new policies alongside the return-to-work bonuses.
Ducey pledged nearly $14 million for community college scholarships and GED programs and promised to pay three months of free childcare to any parents who qualified for the new program. The state delivered the promised child care subsidies — 740 of those were approved before the application period ended. But it hasn’t handed out any community college scholarships — as with the last time we checked two months ago, the website still says more information about that program is “coming soon.”
Local man gets job, though
When we first reported this story, we told you about John Bower, a Democratic organizer who had been laid off because of the pandemic and had never requested any kind of public assistance before.
After receiving unemployment on and off for nearly a year, he had received a notice of ineligibility and lost his benefits for the key timeframe during which a person must have been on the unemployment rolls to receive a return-to-work bonus. He was appealing that notice of ineligibility when we spoke and holding two part-time jobs — not in politics, but at local restaurants — that provided enough to get by, barely.
As we checked back in on the return-to-work bonus program, we wanted to check back in on Bower as well — to see what happened with his appeal, and if he’s feeling the benefits of this roaring economy Ducey is always bragging about.
Bower lost his appeal, but for reasons he’s not totally sure of, he received the back unemployment he argued he was owed (minus $60 per week — again, he’s not sure why).
But DES never sent him a notice that he had received the pay or was eligible for a bonus. He only found out because he checked his prepaid unemployment insurance card and it had money on it. He applied for a return-to-work bonus but hasn’t received it yet.
Still, his personal economy is looking better. He got a full-time job as a field organizer for the Democratic Congressional Campaign Committee.
“I should be out of the hole I was in soon but still have to serve (at a restaurant) on the weekends to help pay off my credit card debt before it starts accruing interest lol,” he wrote to us on Twitter.