AWI Issues

Latest article from Jim Stratton - http://www.orlandosentinel.com/business/os-unemployment-failing-standards-20100316,0,1596049.story


Jobs agency says feds keep bulk of program funding

By Jim Stratton, ORLANDO SENTINEL

2:52 PM EDT, March 16, 2010


State unemployment officials have blamed their failure to meet key federal performance standards on a funding formula that takes 68 percent of the money that Florida sends to Washington, D.C., to pay for the system and funnels it to other states.

The Agency for Workforce Innovation said the state gets only 32 cents back for every dollar it collects and passes on to the U.S. Department of Labor. The money covers the administrative costs of each state's unemployment benefits program.

Florida is a "donor state," meaning it sends more money to Washington than it gets back — in essence subsidizing the programs of other states.

This "chronic underfunding," Workforce officials say, has made it impossible to meet federal standards given the flood of unemployment claims the agency has received. Claims surged by more than 390 percent from March 2007 to September 2009. The agency said it paid more in the first two months of 2010 than it did in all of 2006.

"Florida has not historically received the same funding level proportionally as other states," agency spokesman Robby Cunningham wrote in an e-mail, "because our program costs are not considered high in comparison to the cost of running the program in other states."

Workforce Innovation, the Sentinel recently reported, doesn't pay claims quickly enough, takes too long to determine whether a laid-off worker is eligible for unemployment insurance and fails to resolve appeals in the time prescribed by the Labor Department.

In all three categories, Florida ranks near the bottom third in the nation, according to DOL reports. It is 37th in making payments, 34th in processing appeals and 33rd in determining eligibility.

The Labor Department wants states to make 80 percent of eligibility decisions within 21 days of application. Florida has been handling fewer than half of its cases in that time. The department requires that 60 percent of appeals be addressed within 30 days. Florida dispenses with 12.5 percent of cases in that time.

And the Labor Department requires that 87 percent of first-time payments be made within 14 days of a worker being deemed eligible. Florida meets that timetable 82.1 percent of the time.

Advocates for the unemployed acknowledge the soaring jobless rate has made it more difficult for the state, but they put little stock in the claim that AWI was underfunded.

Maurice Emsellem, the co-policy director at the National Employment Law Project, said the federal government has provided hundreds of millions of stimulus dollars to pay for administrative costs. Emsellem called the "donor state" issue a "red herring."

"There was never a worse time for the state to argue they are not getting their money's worth back from federal taxes," Emsellem said.

Administrative costs of unemployment are financed by a federal tax applied uniformly to all states. The government collects the money and distributes it based on the workload of state jobless agencies. States with historically low unemployment rates – such as Florida – haven't gotten as much back.

But since unemployment began climbing, the federal government has poured money into the states to help cover growing administrative costs. AWI points out that it opened a new call center, expanded its hours and hired more than 1,000 new people. It also will use federal money to replace a mainframe computer system that is more than 35 years old.

Despite the added personnel and call center, the agency fell below federal standards.

NELP Deputy Director Andrew Stettner said problems go beyond a lack of resources. They appear, he said, to be a "management issue."

"Just saying you've hired a bunch of people isn't enough," Stettner said. "You want to know they've identified the problems and have taken steps to solve them."

Jim Stratton can be reached at jstratton@orlandosentinel.com or 407-420-5379.

Good article. but talking about that old computer is getting old!
No one was prepared for this state's collapsing economy....

merry

MerryL wrote:
No one was prepared for this state's collapsing economy....

MerryL? When has anyone ever been prepared for crisis?

BTW, when has anyone ever been prepared?

Good grief, talk about whining excuses. Of course it costs less here to distribute funds and thus less money comes back--Florida is in the lowest levels of numbers per unemployed who actually can qualify for benefits, due to the archaic laws that were the subject of all that attempted reform last year. That was the whole point, provide more services for more people, and get more federal money. Duh!

Granted, some of the provisions the feds wanted may be debated as justifiable or not, but one of the most antiquated is the practice of discounting earnings in the previous quarter toward benefit eligibility. The state couldn't even agree to change that outdated rule that survives from the time when earnings reports were gathered by the Pony Express.

Red herring excuses for sure.