Flood could wash out unemployment benefit fund
By Deneen Gilmour
The Forum
The Grand Forks flood could eat up all the money in North Dakota’s unemployment benefit fund unless Congress kicks in federal money.

Overnight, the flood washed up to 20,000 people out of their jobs. Within six months the flood could put a $38 million pinch on North Dakota’s unemployment fund – a fund that now holds about $37.7 million.

Gov. Ed Schafer has asked Speaker of the House Newt Gingrich for federal money to keep the fund solvent. Legislation hasn’t been introduced in the House yet, said Congressman Earl Pomeroy, D-N.D.

"I discussed it with Gingrich Friday night and he seemed agreeable to ... assuming federal responsibility for the unemployment benefits," said Pomeroy. "Now we have to make sure the speaker’s early agreement takes place."

Schafer said Tuesday evening he isn’t confident North Dakota’s congressional delegation will be able to deliver the needed help.

In the week after the April 18-19 Grand Forks flood and downtown fire, about 10,000 people applied for unemployment benefits. Almost all of Grand Forks’ 50,000 residents had to evacuate and nearly every Grand Forks business closed. Some have reopened. But some will never recover.

Job Service North Dakota expects 15,000 to 20,000 Grand Forks residents will apply for unemployment benefits. If each person receives an average weekly benefit of $175 for six months, it’ll draw $38 million from the job insurance trust fund. The fund’s balance was $37.7 million at the end of March.

"It’s not overstating it to say this threatens the fund’s solvency," said Schafer. "If we zip out all our money, it would seem to me it would have to call for raising (employers’) rates to some extent."

Neither Pomeroy nor Sen. Byron Dorgan’s staff feel certain federal help on unemployment benefits is a sure thing. North Dakota’s three-man Democratic delegation operates in a Republican-controlled Congress.

"We’re not aware of a precedence where a governor has asked for assistance of this type," said Dorgan’s spokeswoman Tammy Lee. "We’re taking each request as they come and dealing with each piece of the pie a day at a time. At some point the state is going to have to take responsibility for some of these disaster costs."

Schafer said he hadn’t heard from Dorgan, Pomeroy or Sen. Kent Conrad about progress on the request. "I’d be more confident if I knew what our congressional delegation is doing," said Schafer. He said Gingrich seemed "very interested when we had him here to speak to people having problems" and Congressman Dick Armey, a North Dakota native, was sympathetic.

"Part of it is, I think they (Conrad, Dorgan and Pomeroy) are starting to realize they’re in the minority. And having (Gingrich and Armey) sit here and look people in the eye was helpful. And our delegation just hasn’t been involved enough yet. Now is when we need them in there fighting. Now Dorgan tells us we can’t get money for the Devils Lake outlet. Well, why not? I’m disappointed. It’s not my job to get this stuff done in Washington."

"We’ve been working this as hard as we know how," said Pomeroy. "You don’t just get a letter from the governor and pass a bill the next day. I hope we act on this in the next couple weeks. We’ve been hit with a record flood and now we need to act in a bipartisan manner. At a time when businesses have been hit with so many other costs, you surely don’t want to exacerbate it by running up unemployment insurance rates."

Federal legislation – if it’s drafted – would let North Dakota employees collect benefits from the federal Disaster Unemployment Assistance fund. Farmers and self-employed North Dakotans hurt by the flood are already receiving benefits from that fund.

"We’re not alarmed but we need to address the situation," said Gayle Schuck, a spokeswoman for Job Service North Dakota.

"The disaster and how it’s affected the fund is a concern," said N.D. House Majority Leader John Dorso, R-Fargo. He noted that Schafer has decreased rates employers pay for unemployment insurance because of good economic times. "Now we have a disaster on our hands," said Dorso. "So if we bump up the rates to get over this hump it wouldn’t be so terrible."

Dorso doubts Grand Forks unemployment claims will eat up the state’s jobless fund. "That’s a worst case scenario," he said. "You’ve got to think a lot of those businesses will be up and running as soon as possible. And any able-bodied person should be able to get a job in Grand Forks ... if they can pick up a hammer."

"You have to keep the trust fund solvent," said Jess Cooper, vice president of government affairs for the Greater North Dakota Association. GNDA is the state’s chamber of commerce. "Nobody believed when the trust fund was established, or any time since, that something like this would happen. The request of Congress is a legitimate one."