Lawsuit Argues Ducey Violated Arizona Law In Cutting Unemployment Benefits

By Tom Maxedon
Howard Fischer, Capitol Media Services
Published: Sunday, September 5, 2021 - 10:46am
Updated: Monday, September 6, 2021 - 8:48am
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Gov. Doug Ducey violated state law when he unilaterally cut off the extra $300 a week the unemployed in Arizona were getting, a new lawsuit charges.

Legal papers filed Friday in Maricopa County Superior Court contend that Arizona is required by state law to cooperate with the federal government to maximize benefits for those who are eligible.

Instead, the attorneys for Unemployed Workers United and several individuals say that the governor decided, on his own, that Arizonans should not get the extra money as of July 10. And that, they said, left unemployed in this state with benefits capped at $240 a week, the second lowest in the nation.

The lawsuit also contends that the governor's action is unconstitutional, saying the question of benefits belongs to the Arizona Legislature. But he acted on his own.

Attorneys for the plaintiffs want a court order for the state to reimburse those whose benefits were cut off.

Paul Gattone, one of the lawyers, said there are about 100,000 Arizonans still collecting benefits who should also have been getting the extra $300 for the past eight weeks. That comes out to $2,400 per There was no immediate comment from the governor.

But Ducey, in making the announcement in May said the move was justified. He said that employers were having trouble finding workers for what they were willing to pay, particularly in the restaurant and hospitality industry.

The governor, however, attached a carrot to the plan.

He said anyone who was collecting benefits would get a one-time $2,000 bonus if they take a full-time job by Sept. 6. And the state also offered some child-care assistance and even a semester of community college tuition for those who go back to work.

"In Arizona, we're going to use federal money to encourage people to work ... instead of paying people not to work," Ducey said n a video announcement of his decision.

Central to the legal fight is the Federal Pandemic Unemployment Compensation program. Approved by Congress in March 2020, it initially provided an extra $600 a week on top of state benefits.

Arizona agreed to accept that money.

The amount was later cut to $300.

Attorneys for the plaintiffs say that the legislature essentially required Ducey to go along. They cite state statutes which require the Department of Economic Security, which administers the unemployment fund, to "take such action as may be necessary to secure to this state and its citizens all advantage available under provisions of the social security act that related to unemployment compensation."

Despite that, they said, Ducey cut off those benefits effective July 10, even as the cost of housing in Arizona's two largest metropolitan areas grew faster than the national average.

"Tucson and Phoenix are among the top 10 cities in the nation experiencing the fastest rent increases during the pandemic, with rents in both cities increasing approximately 15% for the average renter during the past 18 months," the attorneys said. And they said that, absent financial relief, some of the individual plaintiffs are at "imminent risk of eviction and other negative, dire consequences" because their income is limited to $240.

In seeking the court order, the lawyers say there is little financial burden to the state. Instead, they argued, all Arizona has to do is reverse course and accept federal money that is available.

In making the announcement in May, Ducey press aide C.J. Karamargin said there were plenty of jobs out there and little reason for people to be collecting benefits. More to the point, he said that restaurants and hotels are struggling to find workers. "The hospitality industry in Arizona, a critical part of our economy, was perhaps the hardest hit sector," Karamargin said. "They cannot find enough workers for the jobs they have to fill," he continued. "And this plan is aimed at helping them fill those positions."

But Karamargin said that problem extends to other sectors of the economy where employers are having trouble finding workers. Inherent in that is the governor's belief that there are those for whom the total benefits — the $240 a week maximum paid by the state plus the extra $300 — provided a disincentive to out out and find a job. That comes out to $13.50 an hour, before taxes are deducted.

By contrast, the state's minimum wage is $12,15 an hour; restaurants can pay $3 an hour less if the tips that servers get bring them up to the minimum.

Similar lawsuits have been filed in several other states, including successful ones in Oklahoma, Arkansas and Maryland. But judges in Florida, Louisiana and several other states have rejected these claims.

No date has been set for a hearing.