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Auditor General’s Report Documents Need for Multi-Year State Funding To Restore Pennsylvania’s UC System for Unemployed Workers

Employment

Auditor General’s Report Documents Need for Multi-Year State Funding To Restore Pennsylvania’s UC System for Unemployed Workers

Today, Auditor General Eugene DePasquale issued a report of his audit of Pennsylvania’s administration of its unemployment compensation (UC) system.  The report concluded that $35 million is needed to return around 500 furloughed UC workers to their jobs administering benefits for unemployed Pennsylvanians.  But alarmingly, it also projects that without the infusion of tens of millions of additional state dollars, three more UC Service Centers will be shuttered, and unemployed workers will no longer have any opportunity to speak with UC staff.

The Auditor General’s report only hinted at the full effects of the current furloughs on unemployed workers.  It noted that since the furloughs in December, more than 94.5% of all calls to the UC Service Centers resulted in busy signals, topping out at 99.3% in January.

But busy signals have been only one way that unemployed workers have been hurt by the current furloughs.  In many cases, claimants have not been able to get through at all, despite having critical reasons for communication, such as to find out why their benefits have been stopped (or never started).  People have stood in line for hours at Career Link offices around the state, waiting their turn to use a single telephone that communicates directly with the UC Service Center.  Even people with clear eligibility for benefits have waited months to be paid, because of the backlog of work.  The impact of the current furloughs on claimants is recounted in detail in the report No Relief to Those Who Need It Most: The Unemployment Compensation Crisis of 2016-2017 (Philadelphia Legal Assistance, Feb. 2017).

As badly as the UC program has served unemployed Pennsylvanians since the furloughs in December, the report indicates that without state supplemental funding, it will get far worse.  It projects that without state supplemental funding of $12.1 million in 2017 and $20.2 million in 2018, three more service centers will be closed and their staff furloughed.  The remaining staff will not be able to do more than process claims, leading to an administrative system conducted solely online.  Even communications between staff and claimants will be electronic.

There is precedent for an entirely online system.  In 2011, Florida began requiring all UC filings to be online.  Since then, UC recipiency has fallen to 1 in 8 unemployed workers, the lowest rate in the country.  See the report of the National Employment Law Project, Ain’t No Sunshine: Fewer than One in Eight Unemployed Workers in Florida Is Receiving Unemployment Insurance (NELP 2015).

The Auditor General’s report projects that if the staff is reduced through the closing of three more UC Service Centers, the insufficient staff will lead to long delays in processing claims.  According to Sharon Dietrich, Litigation Director of Community Legal Services (CLS), “Timely processing of unemployment claims is required by federal regulations.  If Pennsylvania’s program cannot meet these federal guidelines, the 90% credit that Pennsylvania’s employers receive on their federal unemployment tax liability could be put at risk.”

Fortunately, there is a viable solution to these funding problems that does not involve appropriations from general revenues.  The state’s UC Trust Fund includes employee contributions, which may be used to shore up the administrative system.  These contributions are projected by the PA Department of Labor and Industry to average $213 million per year between 2016 and 2026.  These funds can more than adequately supplement the federal funds that are currently providing all of the resources for the UC administrative system.

Ms. Dietrich stated, “We need a multi-year funding bill to restore all of the UC staff who were furloughed last year and return operations and customer service to pre-2017-levels.  We certainly can’t afford to make matters worse by reducing UC staff even more in the next few years.  If we do, the UC system will no longer serve even people who are eligible for unemployment benefits because they have lost their jobs through no fault of their own.”

 

About Community Legal Services, Inc.:

Community Legal Services, Inc. was established by the Philadelphia Bar Association in 1966. Since then, CLS has provided legal services to more than one million low-income Philadelphia residents, representing them in individual cases and class actions, and advocating on their behalf for improved regulations and laws that affect low-income Philadelphians. As the city's largest provider of free legal services, CLS assists more than 11,500 of Philadelphia’s poorest residents with their legal problems each year. For more information, contact 215-981-3700 or visit www.clsphila.org.

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Date: 
04/25/2017