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When Channel 2 Action News recently reported that the state of Georgia has borrowed several hundred million dollars to pay unemployment benefits, state Democratic Party leaders knew who to blame.
"[Georgia] Republicans have mismanaged unemployment benefits and now might have to cut them or hike taxes on small businesses," the party wrote in a Nov. 18 message on its Facebook page.
Some intrepid AJC PolitiFact Georgia readers (disgruntled Democratic politicos, party officials say) alerted us to the posting and asked us to investigate.
The claim took us by surprise since the man in charge of unemployment benefits, Georgia Labor Commissioner Michael Thurmond, is a Democrat.
One of those critics, Andre Walker, objected to the Democratic Party's claim on his website, Georgia Unfiltered. Walker said the Republican-led state Legislature allocated about $47 million a year between 2006 and 2008 for unemployment benefits. In 2009, the total rose to $60 million. Earlier this year, the Legislature approved $56 million. Walker also noted that Thurmond is a Democrat.
"Where's the mismanagement?" Walker asked in his blog.
The state Labor Department said the Legislature does not allocate funding for unemployment benefits. Those funds, the department said, come from taxes paid by Georgia employers.
To sort this all out, let's begin by looking at how the Georgia unemployment program works.
Businesses in Georgia pay into a state fund that the Labor Department uses to pay unemployment when workers are laid off or terminated through no fault of their own. In 1998, Georgia had $1.9 billion in the fund, said Brock Timmons, chief of the Labor Department's employment insurance legal section. In 2003 and 2004, the state paid out about $722 million a year from the fund, Timmons said. In 2009, at the height of the Great Recession, Georgia paid $1.47 billion in unemployment benefits. Georgia's unemployment rate has been above the national average in recent years. It is currently at 9.9 percent; the national average is 9.6 percent.
"It took us by surprise," Timmons said of the rising unemployment.
Some employers, as a result of the tax cuts that took effect between 2000 and 2003, paid little or no money to the unemployment fund.
The percentage Georgia employers paid in the fund increased by 15 percent in 2009 and by 13 percent in 2010.
State officials say Georgia has received advances totaling $454.5 million from the federal government. Georgia must pay back the money but has not set up a timetable to do so. Timmons said Georgia employers could pay more in federal unemployment taxes if the loan isn't repaid by November 2011.
Georgia Democratic Party spokesman Eric Gray told us the Facebook message could have been more precise. He posted a column on Georgia Politico explaining the party's point. The column says state GOP leaders did not make the "tough choices" necessary to avert this problem when the recession hit. The column does not say what the "tough choices" were.
"With the unemployment fund nearly broke, they reluctantly accepted stimulus money from the federal government to replenish the unemployment fund. This bought them time to address the problem," the column says. "Yet Republicans stuck with what they are good at -- ignoring it even more."
The column does not specify what state leaders should have done to avoid the current problem of borrowing money from the federal government.
The funds are still managed by the state Labor Department, which is run by a Democrat, not a Republican. Democratic Party officials say they should have been more precise in their description of the problem on Facebook. We agree. We rate it as False.
Democratic Party of Georgia Facebook page
Georgia Politico, "Guest: Republican Mismanagement of Unemployment," Nov. 20, 2010
Georgia Unfiltered, "True or False? Republicans Mismanaged Georgia Unemployment Benefits"
Telephone interview with Georgia Department of Labor official Brock Timmons, Nov. 19, 2010
Telephone interview with Georgia Democratic Party spokesman Eric Gray, Nov. 22, 2010
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