Why Wolf and the Senate GOP are fighting over unemployment center layoffs

Almost 600 state employees at three unemployment compensation call centers will be furloughed come mid-December. And figuring out how to pay for the program has been a bitter political issue in Harrisburg in recent weeks. Maybe you’ve read about it.

Gov. Tom Wolf’s administration has condemned the Pennsylvania Senate’s decision to table a bill that would have extended funding before they left for break. Jennifer Kocher, spokeswoman for the Senate GOP, has insisted that fault lies with the governor, who, she says, has other means to fund this program until the Senate votes. The Senate had a vote scheduled last week, but then cancelled it after "a closed-door caucus meeting," according to the York Dispatch.

The bill they left vote-less would have amended Act 34, a law established to provide supplementary state moneys to the program. An August brief on the bill explained the legislature passed it in light of shrinking federal subsidies. The AP reported that the legislature passed it after federal officials criticized the program’s efficiency. The law authorized transfers to the Unemployment Compensation Service and Infrastructure Improvement Fund.

These transfers are bound to expire, and the current bill asks for $57.5 million for 2017. As federal grants have continued to decline since Act 32 passed, the Department of Labor and Industry has stated they’d use the extended funding to continue modernizing their system. The bill passed in the Republican-led House by an overwhelming margin in October, 175-13. But Senate Republicans are frustrated that the technical advancements haven’t already been completed, and aren’t already saving the state money. Kocher said the program has lagged to the point where they’re not in compliance with the act to begin with.

"It was supposed to wean itself off of dependency for additional money," said Kocher. "Considerations need to be made for an exit strategy."

Kocher continued that the Senate GOP asked L&I for a concrete plan to achieve compliance that they never received.  Due to this, they did not vote. The funding sends questions back "to governor’s feet," she told us. To PennLive, she put it this way: "This is the governor's choice at this point. There are other options."

The governor’s "options" would be to locate money from another funding source.

"We've seen that in other areas where he's had spending priorities, he's been able to find the money," Kocher also told the paper. "(So) laying off people and choosing job loss as a solution is his choice… It's really disheartening that he doesn't think any more of the employees than he does."

In other words, Kocher was pretty much saying the governor should figure it out.

"This is just another instance of the governor using employees as pawns," she told NewsWorks. "To get these people through to the beginning of the year when we come back into session and could work on this would take less than $15 million."

Sara Goulet dismisses the notion that Labor and Industry never provided a plan. A memo on the act included the following details, among others:

"If Act 34 is extended, UC Programs projects utilizing the associated funds in the following ways:

• As discussed above, modernization of the UC Benefits delivery system and the adjudication and appellate processes, which will represent a major investment.

• Continued support of the legacy mainframe system until it is replaced by benefit modernization, requiring a huge double outlay of funds, one for maintenance of the old system while developing the new one.

• The next generation of phones as part of the overall Commonwealth telecomm upgrade.

• Continued replacement of desktop computers and laptops at end of lifecycle.

• Operation of the new E-pay system for UC overpayments.

• Meeting new UC requirements under WIOA.

• Support of maintenance and continued improvements in the UC Tax UCMS system.

• Beginning the process for next-gen development of Wage and Tax systems.

• L&I Internal IT services and support for all operating systems."

 

We asked Kocher what specifics the Senate GOP would like to see. "It’s not our responsibility to tell the department how to run itself… It’s not that we’re going to tell them they need Macs," but rather the department needed to follow Act 34. Asked via email which provisions of Act 34 exactly the Senate GOP wants to see addressed, Kocher pointed to a section of the law that calls on the department to improve efficiency and list its expenditures doing so.  

"There was no timeline for how to comply with Act 34," said Kocher.

An August brief on the law pegs the completion of the benefit modernization process as years off:

"What we do know, is that successful completion of benefit modernization, which will take several years, will bring significant efficiencies that will reduce operating costs and replacement of our current manual- heavy processes will allow continued draw-down of personnel. This would also allow us to end the high costs associated with maintaining the legacy mainframe."

The current computer system is four-decades-old.

In an email to PolitiFact PA, Goulet didn’t hold back on the matter: "[The Senate] never raised concerns during the course of not voting; they just chose not to vote, letting the bill pass over into the next session. The Senate was fully aware of the consequences of non-passage and they chose to ignore that and then place blame on the governor and the department. The blame for these layoffs rests squarely with the Senate," she wrote. "As late as this past Wednesday morning, we (the department, the Governor) had assurances and every reason to believe the Senate would do the right thing and pass HB 2375, but they did not, and now they are choosing to pass the blame. It’s shameful."

Would it really "take less than $15 million" to "To get these people through to the beginning of the year," as Kocher explained to NewsWorks? Kocher told PolitiFact Pennsylvania that her quote was taken out of context. It wasn’t a figure based on Senate GOP analysis of salary costs. She said she was referring to a quarter of proposed funding ask, $57.5 million, which could account for the Senate’s break until they’re back in January.

"We’re not even saying that it would take a quarter to enact it; we just need more time," said Kocher.

Anne Baloga, director of legislative affairs at the budget office, said it remains unclear when the Senate will vote. "There keep being discussions about us finding [the funds.] Loans have to be paid." she said. "Doing our fiduciary duty to the commonwealth, we cannot transfer to save funds when we have no idea if we can pay it back."

Baloga said the current appropriation might hit zero by April.

Mark Nicastre, a spokesman for Governor Wolf, pointed to comments State Senator Scott Wagner made to the York Dispatch to explain the administration’s lack of confidence. Wagner, who said he’ll run for governor, told the paper he was a leader in the caucus meeting where they decided to cancel the vote.

"I dug my foot in yesterday," he told the paper. "They didn't get the job done and need to be held accountable. Let them close down."

He also said: "I consider serving on the Senate like serving as a board member for a Fortune 500 company. If all this was happening, I would be screaming at the next board meeting, demanding (Wolf) be fired as CEO. But we can't do that."

Kocher told PolitiFact Pennsylvania that Wagner wasn’t speaking for the Senate GOP when he mentioned shutting down the department.

"Maybe he had an individual position and had conversations with members," she said. "That’s not a caucus position."