(CNN) — Louisiana will stop paying the $300-a-week federal boost to pandemic unemployment benefits at the end of July — the first Democrat-led state to drop the assistance.

Gov. John Bel Edwards on Wednesday signed a bill that terminates the federal enhancement early in exchange for increasing the maximum state unemployment benefit by $28 to $275 a week, starting in 2022.

Louisiana is joining 25 GOP-led states that are dropping at least one of the three pandemic unemployment insurance programs that Congress enacted in March 2020 and extended twice to support people during the virus-fueled economic downturn. The programs are scheduled to expire in early September in the states that are continuing them, under a provision contained in the Democrats’ $1.9 trillion relief package that President Joe Biden signed into law in March.

Citing workforce shortages, the Republican governors say the expanded benefits are keeping the unemployed from accepting job offers.

In addition to the $300 boost, the pandemic programs provide benefits for freelancers, the self-employed, independent contractors and certain people affected by the coronavirus pandemic and for those who’ve run out of their regular state payments.

Jobless workers in Indiana are challenging Republican Gov. Eric Holcomb’s decision to cease all three programs after Saturday, in what may be the first lawsuit of its kind.

Why Edwards is ending the $300 payment early

Asked last week about ending the enhanced payments early, Edwards said that he was already considering discontinuing the payments around August 1, He added that he was waiting for a report that weighed the benefits to Louisiana of continuing the $300 boost with the costs of employers not having enough workers.

Edwards noted that Congress opted to have the program expire on Labor Day because schools will be open by that date — but pointed out that Louisiana schools start in August. So ceasing the payments on July 31 was “keeping the spirit of that,” he said.

The state’s business leaders cheered the decision to terminate the pandemic program early.

“Enabling businesses to compete with other businesses for talent rather than an enhanced unemployment program will help fill record-breaking openings and get Louisianans back to work,” said Adam Knapp, CEO of the Baton Rouge Area Chamber, which had called for Edwards to stop the extra $300 payment.

But left-leaning advocates said they were concerned about the nearly 48,000 jobless residents who will lose a vital lifeline — particularly since Louisiana currently has one of the lowest maximum unemployment benefit in the nation at $247 a week.

“While we are of course supportive and want to see benefits increase at the state level, we did not think pulling the rug out from under people in the middle of a pandemic still was an acceptable deal,” said Davante Lewis, director of public affairs and outreach at the Louisiana Budget Project.

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