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Montana’s return-to-work program nears end; state plans to redirect unused funds

HELENA (KPAX) — State leaders say a program to provide bonuses to Montanans who returned to the workforce is likely to pay out only a third of what was allocated for it.

A state commission has now recommended reallocating $10 million of that money to other programs. The commission, which includes lawmakers from both parties and members of Gov. Greg Gianforte’s administration, made the recommendation during a meeting on Wednesday.

The administration announced the return-to-work bonuses in May, using money from the federal American Rescue Plan Act. They offered $1,200 payments to people who were receiving unemployment benefits as of May 4 and who take a new job between May 4 and Oct. 31 and remain with that employer for at least four weeks.

The program was intended as an incentive to get people back into the labor force and help employers who say they’ve had a hard time filling open positions. It went along with the state’s decision to phase out additional pandemic-related benefits that had been added to the unemployment insurance system. That change took effect on June 27.

The state initially estimated about 22,000 people would be eligible for the payments. Leaders allocated $15 million to the program, enough to pay for 12,500 bonuses.

As of Oct. 26, the Montana Department of Labor and Industry (DLI) reported they had received 5,804 applications for return-to-work bonuses. 1,917 of those have been approved, and the department has distributed $2.3 million in payments. 1,200 have been denied, with the rest still being processed.

DLI Workforce Services Division administrator Scott Eychner told the commission that they have another $1.2 million ready to be paid out, and they expect no more than $1.5 million will be needed for future applications between now and Nov. 28 — when an eligible worker who starts on the last day of the program will reach four weeks on the job. That would total a maximum of $5 million, leaving $10 million unused.

“I will tell you, to be honest, it will likely be a little bit more than the $10 million, but $10 million is a safe floor with everything we have and everything we estimate to have,” Eychner said.

The commission recommended redirecting $4.35 million of that money to a new program, aimed at recruiting health care workers from outside the state to come to Montana. It would offer up to $12,500 in reimbursement for an employee’s relocation expenses if they take a job in the state and work for at least a year.

Scott Mendenhall, Montana’s ARPA director, said Montana already had a challenge in attracting and keeping health care workers, and the pandemic only made it harder – with many employees having to work extra shifts and deal with added stress.

“We have a need here, and there’s an abundance of workers elsewhere,” he said. “This is aimed at trying to put those two together.”

Mendenhall said that, for a variety of reasons, health care workers in other parts of the country are leaving their jobs or being fired. He told MTN News that could potentially include workers unhappy with vaccine requirements in other states.

A total of $4 million of the money would be used for the relocation expense payments, while the other $350,000 would go toward advertising the program to businesses and to job seekers.

Commission members unanimously approved the recruitment initiative. However, Democrats said they were disappointed there haven’t been more steps taken to support the workers already in the state.

“I do think that we’re missing the piece that is investing in Montanans that have stuck with their jobs even as tough as they’ve been and as stressful as they’ve been the last two years,” said Rep. Kim Abbott, D-Helena, the House minority leader.

Abbott made a motion to allocate $13 million to support retention bonuses for health care workers, but the majority of the commission didn’t support it. Rep. Llew Jones, R-Conrad, said he was concerned that would have been “subsidizing” salaries and the benefits wouldn’t last when ARPA funding expires.

“We can, in a one-time manner, for a fixed period of time, try to help folks by ensuring there are more individuals that can return to work,” he said.

The commission recommended the remainder of the unused money from return-to-work bonuses be put toward a business innovation program that will be discussed in greater detail at a meeting next month.

Gianforte’s office says, as they approach the end of the return-to-work program, they’re satisfied with the results.

“Ending federal supplemental unemployment benefits and offering return-to-work bonuses have been effective, successful tools to get Montanans back in the workforce. In September, Montana’s unemployment rate reached a 14-year low, and we recovered all jobs lost since the start of the pandemic. Further, since the governor took office, unemployment claims in Montana are down more than 90%,” said Gianforte spokeswoman Brooke Stroyke.

Also during Wednesday’s meeting, the commission made several other recommendations for using ARPA funds.

They supported dedicating more than $2 million to hire additional Department of Justice investigators and public defenders to address a rise in violent crime in Billings during the pandemic. They also approved “gap financing” to support affordable housing developments that have seen their costs increase due to COVID-19.