WisGOPs whined about unemployment delays in 2020, but won't pay to fix it in 2021

This time last year, there were large amounts of Wisconsinites out of work, but they couldn't receive unemployment benefits because their applications and work histories needed more investigation, but the state didn't have the staff to deal with the onslaught of new claims. You may recall that Wisconsin Republicans spent lots of time complaining about those delays, while ignoring the fact that they put in many of the barriers that were keeping Wisconsinites from getting their benefits.

As a result of those delays, the Evers Administration ultimately signed contracts with staffing agencies, made some technological adjustments, and people were hired up at DWD.

Combined with an eventual decline in claims that has sped up in recent weeks, and things seem to be running relatively smoothly at the Wisconsin Department of Workforce Development today. As the Legislative Fiscal Bureau tells us, the federal government attempts to offset the costs of running the state's unemployment program.

1. The U.S. Department of Labor (USDOL) projects a state’s UI workload in the next fiscal year using statistical models and economic assumptions. Once USDOL has projected a number of continued weekly claims, it recommends a "base" budget allocation sufficient to administer that number of weekly claims, along with an estimated number of other related workload items, such as initial claims, non-monetary determinations, and appeals. DWD will receive $55,521,613 in base administrative formula grant funding for federal fiscal year 2020-21 (FFY 21). States have discretion to expend these federal UI administrative grant funds as necessary to manage and operate their UI programs to meet established goals and requirements within the parameters of federal law.

2. States can also earn "above-base" funding as the state’s insured unemployment rate rises above the base rate. Under normal circumstances, the USDOL provides above-base dollars when USDOL has not expended its entire federal appropriation and workloads in states have exceeded projections. Above-base funding is sporadic and, when provided, comes one quarter after the associated increase in workload occurs. DWD received $5.6 million in above-base funding in federal fiscal year 2019-20 (FFY 20).

But due to the added staff and other costs, LFB says the state is slated to run a significant deficit when it comes to its operations on handling unemployment claims.

…Estimated UI administrative costs over FFY 22 and FFY 23 total $230 million and exceed the $130.1 million in estimated base and above-base administrative grant revenues by $99.9 million through September 30, 2023. According to DWD, and as shown in the table, this funding shortfall will be supported with CRF reimbursement funding, UI administrative funding carried forward from FFY 21 to FFY 22, FFCRA emergency grant funds, and the continuing balance and projected annual revenues from the program integrity fund. After accounting for these additional estimated revenues, the table shows that the Department expects that costs will exceed revenues by $31 million through September 30, 2023.

But the WisGOPs say that shouldn’t be a problem, because they claim March’s stimulus funds can be tapped to pay for it! Let’s see what LFB says is available from that.

The federal American Rescue Plan Act of 2021 (ARPA) provides $2.0 billion to USDOL for fraud detection and prevention, and to promote equitable access and ensure timely payment of benefits to eligible workers. Among the approved USDOL uses of these funds is grants to state UI programs to: (a) establish procedures or the building of infrastructure to verify or validate identity; (b) implement federal guidance regarding fraud detection and prevention; and (c) accelerate claims processing or process claims backlogs due to the pandemic. ARPA does not specify a manner of allocating any funds to states, and guidance regarding this appropriation has not yet been provided by USDOL. Although it is not clear how much funding could be allocated to Wisconsin, this federal funding could be used to support UI program operations.

That's $2 billion nationwide, so if you figure Wisconsin is 1.7% of the US population, our share of that $2 billion would come to about $34 million. Which would pay for the entire deficit, but pay zero toward tech upgrades and other ongoing improvements to UI administration.

The LFB also mentions that the Evers Administration could use some of the $2.5 billion in discretionary money that the state will receive over the next 2 years, but much of those funds have already been planned on to be spent for other needs, such as $420 million in grants to small businesses.

So Evers was planning to use $15 million in state money in 2022 and 2023 to make up the deficit that exists in unemployment administration. And now the GOPs say “no”, which means that we will have to find somewhere else to make up the money, or eventually lay off a sizable amount of the staff that was added to take care of the delays in getting people their benefits, and in clearing up questions about their applications.

And did the WisGOPs remove any of the barriers and added paperwork that made getting benefits such a pain in the backside for so many state residents? OF COURSE NOT, and in fact, they're bringing back more of this idiocy.

Also Wednesday, the Republicans voted to reinstate a drug testing policy for some recipients of unemployment benefits.

In addition, they approved commissioning a study that would link how long Wisconsinites can receive benefits to the state's unemployment rate. Under that system, the unemployed would qualify for benefits for a longer period when jobs are harder to find.

Of course, the flip side is that they also can cut off people faster if the unemployment rate goes down. Even if the number of jobs remains significantly below where they were at the peak (which is the situation we are in today).

It proves just how fake the WisGOPs' concerns were about the problems in our unemployment system. Because now when we are flush with cash and have the ability to fix the problems of understaffing and barriers to benefits, they aren't doing a thing about them. In fact, they're perfectly fine to see things get frustrating for the typical Wisconsinite in need of benefits, both because it keeps the costs down for employers, and because it might make Evers look bad. And that's all they really care about these days.