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Wisconsin Lawmakers OK Overhaul of Aging Unemployment System

The state’s unemployment insurance system, which has struggled against a benefits backlog, has gotten the green light for modernization from lawmakers, but funding it could prove challenging.

by Mitchell Schmidt, The Wisconsin State Journal / February 24, 2021

(TNS) — The state Assembly on Tuesday unanimously passed bipartisan legislation that would begin to overhaul Wisconsin's aging unemployment insurance system, which officials have blamed for the backlog of claims spurred by the COVID-19 pandemic.

The bill, which passed the Senate 27-3 last week, passed the Assembly 89-0 and now heads to Gov. Tony Evers, who has said he plans to sign it. The legislation also includes a temporary extension of the state's one-week waiting period to receive unemployment benefits and adds liability protections against COVID-19-related lawsuits for businesses, schools and governmental entities — measures that were included in coronavirus relief legislation Evers vetoed earlier this month.

Evers had originally called on the GOP-led Legislature to convene in special session earlier this year to discuss a proposal to spend $5.3 million to begin updates on the state's unemployment system, which uses 60-year-old computer programming language.

Republicans on the state's budget committee removed funding from the bill last week. As written, the state Department of Workforce Development would first need to use any available federal dollars to begin updates and secure permission from the GOP-led committee for the use of state dollars. The bill allows DWD to begin seeking bids from companies to update the unemployment system, which has been estimated to cost at least $80 million.

Like many states, Wisconsin has been inundated with unemployment claims since the pandemic began, while DWD has faced mounting ridicule for its slow response to addressing the backlog of claims. State Republicans have placed the blame on a lack of leadership from the Evers' administration, while DWD officials have said an unprecedented number of claims, paired with GOP-authored unemployment laws and an antiquated processing system, complicated the adjudication process and exacerbated delays.

Speaking with reporters before the Assembly session Tuesday, Assembly Speaker Robin Vos, R-Rochester, blamed Evers for the state's unemployment system issues — citing state audits released last year that found fewer than 1% of calls to the state's call centers were answered between March 15 and June 30 and that DWD was responsible for 11 of the 13 weeks it took, on average, for the department to resolve initial unemployment claims filed in the early weeks of the pandemic. In September, Evers fired former DWD Secretary Caleb Frostman over the persistent backlog of claims.

"The legislation before us today provides a very simple and easy road map for the governor to finally move forward at DWD," Vos said.

Democrats countered that the state has known for years that the unemployment system needed updates and Republicans, who have controlled the Legislature for a decade, should have acted sooner.

"I wish that we had just allowed Governor Evers to have the funding needed since he has already requested it in this bill and the budget," Rep. Dave Considine, D-Baraboo, said in a statement. "However, I am glad to come together with my colleagues to start this long road of creating a better system for those in need."

Republicans also added items to the bill to waive the one-week waiting period to collect unemployment benefits until March 14 and extend limited liability protections from coronavirus-related lawsuits to schools, businesses and governments.

Evers said in a statement last week the proposed legislation was "not enough, but it's at least a step in the right direction."

"While I wish the Legislature would have provided the funding we asked for that we need to fix this system once and for all, I'm glad the Legislature is finally taking this issue seriously after years of inaction," Evers said.

Evers has also proposed in his 2021-23 biennial budget $79 million in spending to immediately upgrade the state's unemployment system and an elimination of the state's one-week waiting period for unemployment benefits. However, it remains to be seen how much of the Democratic governor's budget will be changed by Republicans.

The one-week waiting period was temporarily waived back in April, but it was reinstated on Feb. 6. The state has missed out on $1.3 million in federal unemployment funds for every week since the waiting period was reinstated.

In addition to legislation reinstating the waiver, DWD has taken initial steps seeking to waive the one-week waiting period requirement through an emergency rule. However, the nonpartisan Legislative Reference Bureau has reported that DWD does not have the authority to waive the rule. The LRB said DWD does have authority to waive work search requirements for unemployment claims, which the department has done.

©2021 The Wisconsin State Journal, Distributed by Tribune Content Agency, LLC.

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