March 12, 2020
State Economic Policies for COVID-19
Dave Wells, Ph.D., Research Director
Governor Doug Ducey yesterday took the first step in state leadership on COVID-19 by declaring a public health emergency. That executive order includes requiring insurance companies and health plans to cover out of network providers and waive co-pays, coninsurance and deductible as it relates to COVID-19.
However, the state should take a number of additional economic steps immediately for public health, workers and families, and small business.
In addition, the legislature needs to make some immediate permanent fixes to the state’s inadequate unemployment insurance system as the existing weaknesses will quickly have a profound impact on those that become unemployed as a result of COVID-19.
- Containing and treating the virus. While the Governor’s Executive Order frees up $500,000 in emergency funds to protect public health, the legislature should follow the lead of Minnesota and immediately tap into one-time revenues or the Rainy Day Fund for up to $20 million to contain and treat COVID-19.
- Paid sick time.Workers should be aware of their guaranteed sick leave as mandated by Prop. 206 in 2016.
- Expanded access to unemployment benefits. Arizona should follow the lead of Washington state and Rhode Island in expanding access to unemployment insurance benefits if their place of employment shuts down or they need to stay away from work temporarily due to COVID-19. The one-week waiting period and job search requirements should be temporarily waived.
- $3 million to support effected workers. The Legislature should establish a $3 million fund for workers forced to quit their jobs due to COVID-19 to cover the equivalent of one-month of unemployment insurance benefits, until they are well enough to seek work and qualify for unemployment insurance benefits.
- $60 million for small business loans. While federal aid may be forthcoming, in the meantime, up to $60 million should be made available as short-term, interest-free loans for small businesses in Arizona facing documented cash flow challenges due to COVID-19 or to help cover additional paid sick time for employees.
- Update unemployment compensation benefits. Beyond these temporary measures, in line with states like Utah and Texas, the legislature should fast track fixes to Arizona’s inadequate unemployment compensation benefits and excessively high barriers to accessing benefits.