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Déjà Vu: Pennsylvania UC System’s Structural Funding Deficits Must Be Repaired So That the Program Works for Unemployed Workers

Employment

Déjà Vu: Pennsylvania UC System’s Structural Funding Deficits Must Be Repaired So That the Program Works for Unemployed Workers

Date Posted: 
02/03/2017

On November 16, 2016, the Pennsylvania Senate finished its last scheduled voting day of the legislative session without passing HB 2375, which would have reauthorized Act 34 of 2013 and provided $57.5 million of supplemental state funding for unemployment compensation (UC) administration.  The next day, the Pennsylvania Department of Labor and Industry (the Department) issued a press release announcing its intention to furlough almost 600 UC staff.  Furloughs for 521 staff began on December 19, 2016.  Since then, the operations of the UC system have practically grinded to a halt.  Unemployed workers seeking to speak with UC staff have faced busy signals first for hours, then for days.

If this story seems somewhat familiar, it is because there is very recent precedent for it.  Just a few years ago, a large staff reduction made in response to inadequate federal funding led to the same problems.  At that time, Act 34 was a consensus solution to what everyone agreed was an unsustainable situation.  A look even further back further reveals that inadequate federal funding for the state UC system has required cost cutting and supplemental funding for around two decades.

This paper puts the 2016-17 UC Administrative Crisis in context.  It discusses:

  • The creation of the UC Service Center (UCSC) system as a cost-cutting measure, and the similarities of the present situation to the 2012-13 crisis;
  • The role of Pennsylvania’s obsolete information technology (IT) and the failure of an effort to modernize it; and
  • The cause of the operational problems: chronically inadequate federal UC administration funding.

The paper concludes with the two key solutions to this most recent recurrence of customer service setbacks for Pennsylvania’s unemployed workers.

  1. The General Assembly should allocate a portion of the employee tax revenues in the UC Trust Fund to supplement the federal administrative funds.  This would permit the furloughed employees to return to work and resolve the current crisis.
  2. The General Assembly should fund, and the Department should complete, effective modernization.  A balance of adequate staffing levels and updated IT is need to provide adequate service to unemployed workers who are entitled to UC benefits because they have lost their jobs through no fault of their own.

For information about the current crisis faced by Pennsylvania’s unemployed workers, see Julia Simon-Mishel, No Relief to Those Who Need It Most:  the UC Crisis of 2016-17 (Philadelphia Legal Assistance, Feb. 3, 2017).

Download full report below.