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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: October 24, 2017 03:44 PM
From: Representative Rob W. Kauffman
To: All House members
Subject: Unemployment Compensation (UC) Funding Legislation
I am preparing to introduce legislation that would provide a multi-year funding “exit ramp” for the Unemployment Compensation (UC) program to end its reliance on the supplemental transfers to the Service and Infrastructure Improvement Fund (SIIF).

Including the funding provided under Act 1 of this year, there have been transfers totaling over $193 million between 2013 and 2017. Although some would like to pretend these transfers are free money, in reality this funding has been diverted from the financially fragile fund that pays benefits to unemployed Pennsylvanians. PA employers and workers currently pay temporary extra taxes to put the UC benefits fund on a path to solvency, and these taxes will only expire when the benefits fund reaches full solvency. Without measures to offset the cost of hundreds of millions of dollars being diverted from the benefits fund, the Department of Labor and Industry must end its reliance on these supplemental dollars.

As you may know, the House Labor and Industry Committee has thoroughly reviewed this issue during the course of three separate hearings this year. All we have found is a Department that has mismanaged the UC program and wasted millions of dollars across multiple gubernatorial administrations. Under the current administration, we have encountered conflicting information, reluctance to provide serious answers, and an unwillingness to discuss substantive reforms to our UC system.

Despite the ongoing incompetence of the UC program management and my frustration with the administration’s approach to this issue, I do not believe that the department will be able to end its reliance on supplemental dollars this year. For the sake of all the Pennsylvanians who may need to rely on the UC system, I am proposing a three-year exit ramp from current service levels and full funding for the project to modernize the UC benefits delivery computer system. Overall, my legislation would provide about $75 million dollars over the next few years for the Department to implement a modern, efficient system and transition to the ability to operate on the approximately $130 million/year they currently receive from the federal government to operate the UC system. Along with this funding, my bill will also:
  • Require that Labor and Industry prioritize efficiency and the generation of cost savings with the implementation of the benefits modernization project.
  • Provide additional information about SIIF spending in annual reports to the General Assembly.
  • Require the Secretary to annually certify that the benefit modernization project is meeting contract benchmarks and will not exceed the total contract cost.
  • Require a temporary advisory committee to monitor the project implementation and report to the General Assembly.

Enough is enough. The Department of Labor and Industry needs to get its house in order. My plan will give them the opportunity to do that over the next three years. Please join me in cosponsoring this important legislation.

Introduced as HB1915