SACRAMENTO — Gov. Arnold Schwarzenegger is prepared to back legislation that would give California $844 million in federal stimulus funds to fix the state's bankrupt system for paying unemployment benefits.
The disclosure by a spokeswoman for the governor was the first indication that the Schwarzenegger administration would comply with federal requirements that make it easier for low-wage workers to be eligible for unemployment benefits.
"Given the current economic climate and unemployment insurance insolvency, the governor supports attaining the infusion of $844 million in federal funding for the state's unemployment insurance fund as we believe this will not require a permanent expansion in eligibility," spokeswoman Camille Anderson said.
The statement surprised advocates for the working poor, who had expected a hard fight to overcome opposition from influential business organizations. Employers fear that expanded benefits could lead to higher taxes on them.
The worker advocates had been pressing the administration to commit to changes in California law needed to bring the state a big share of the $7 billion that Congress and President Obama pledged to help the state provide benefits for its more than 800,000 jobless. Such benefits range from $40 to $450 a week but are slated to jump by $25 a week under Obama's plan.
The governor's backing also was news to the California Chamber of Commerce, a strong Schwarzenegger ally. The chamber had lobbied Schwarzenegger to reject the offer.
Schwarzenegger's commitment to getting the extra funds solidified his break with some fellow Republican governors, who said they would reject the largess because it had "too many strings attached."
To qualify for the money, states must enact laws that would make it easier for workers who had lost lower-wage jobs to qualify for unemployment benefits. The change would also require states to consider a laid-off worker's most recent earnings in calculating eligibility.
An unemployment insurance bill by Assemblyman Joe Coto (D-San Jose) has been introduced in the Legislature this year. But the governor has not analyzed it or committed himself to signing that particular measure, spokeswoman Anderson said.
The California Chamber of Commerce, for now, opposes the Coto bill, saying it hasn't seen any analysis that shows that the broader eligibility for benefits would be good for the state's economy.
