The Times West Virginian

Opinion

September 9, 2010

Cutting ‘non-fraud’ unemployment overpayments can help stabilize fund

For the Times West Virginian

FAIRMONT — It may sound like small potatoes when you’re dealing with annual unemployment compensation of nearly $340 million, but $6.3 million is still a lot of money. And it represents more than 8,000 “non-fraud overpayments” made by the state, a startling fact released late last month.

This isn’t fraud, which typically represents between 1 or 2 percent of payments each year, when someone is still accepting unemployment compensation while working at another job. These overpayments are a slip of the thumb or an extra click of the mouse. And while the state estimates that about half of overpayments have traditionally been returned, persistent joblessness may be keeping those with “found” money from returning it back to the state’s unemployment fund.

But the greatest concern is that the state is on track to bust the fund by February. The unemployment trust fund’s balance is about $112 million, so by late winter, there is a great concern that the fund will be in the red. The state made moves to keep the fund solvent longer by increasing the amount that companies and businesses had to contribute. But with such a sharp increase in new claims — 80,000 in 2008 to 120,000 in 2009 — there was bound be to a time when the fund would be in trouble.

And officials say the increase is the blame for the overpayments last year.

“The increase in unemployment claims experienced throughout the country is, of course, accompanied by an increase in other areas,” state Department of Commerce spokeswoman Catherine Zacchi told the Charleston Daily Mail. “Like all states, West Virginia has had unemployment compensation overpay ments.”

Understood, but not accepted.

State officials say the $6.3 million would only keep the fund solvent for two more weeks. But that’s two more weeks of compensation that would not have to be diverted from other areas or, as in the case of many surrounding states, borrowed from the federal government.

We’re not in as bad a shape as Maryland, Ohio, Kentucky, Virginia and Pennsylvania, which have all borrowed money from the federal government ranging between $133 million to $3 billion.

But it has been fiscal responsibility and accountability that has allowed West Virginia to weather this economic storm far longer than those states. And the fewer dollars we borrow, the better shape we will be in when the economic recovery is complete.

What we want to see are the unemployed offered a helping hand while they seek other comparable jobs. It’s something that thousands of West Virginians rely on during difficult times. And at the same time, we’d like to see less margin of error in a fund that is already in trouble.

In an ideal situation, as the number of jobless increases, the accountability would increase.

 

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