Wagner, amidst criticism, seeks investigation into call-center layoffs

David Weissman

Republican state Sen. Scott Wagner, who has faced criticism and protests over his self-described role in coming layoffs within the state Department of Labor and Industry, wants to dig deeper into a controversy he has blamed on Gov. Tom Wolf.

Sen. Scott Wagner, R-Spring Garden Township, speaks ahead of vice presidential candidate Mike Pence's campaign stop in Manchester Township at Penn Waste Inc. on Thursday, Sept. 29, 2016. Amanda J. Cain photo

Democrats and unions representing the Labor and Industry employees have been critical of state Senate Republicans after leadership chose not to vote on a bill that would have extended until 2017 additional funding the department has received since 2013.

Without the $57.5 million from the proposed bill, the department announced, it will be forced to furlough more than 500 employees and close service centers in Lancaster, Altoona and Allentown, effective Dec. 19.

Wagner, of Spring Garden Township, has been singled out for criticism by Democrats and unions after telling The York Dispatch that he led the charge against holding a vote in a Republican caucus meeting preceding the Senate's last scheduled session day.

At a news conference held Monday in Harrisburg, Wagner said the criticism should be shifted to Wolf, "a failed governor that is seeking to salvage his political career and is using the livelihood of state employees as pawns to do so."

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Wagner, who has said he plans to run for governor in 2018, announced at the conference that he has filed a Right-to-Know request with the Department of Labor and Industry to see all correspondence relating to the layoffs and center closures.

Wagner said he believes Wolf could find the money in the budget to keep the employees and centers and that these actions are happening because Democrats are upset Hillary Clinton lost the presidential election and Republicans gained a supermajority in the state Senate.

Correspondence provided by Wolf's office shows that the department had sent information to Senate leadership detailing the need to extend funding since at least May 26, more than five months before the election.

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A letter dated Aug. 22, sent to the Senate Labor and Industry Committee, on which Wagner served as vice chairman, explicitly states that failure to extend funding would "result in significant furloughs of staff."

Jeffrey Sheridan, a spokesman for Wolf's office, said there's not enough money to pay people, as Wagner alleged, and he doesn't know what "bizarre world" the senator is in.

The bill: The bill in question would have been a one-year extension of Act 34, which allowed the Department of Labor and Industry to use a portion of the state's Unemployment Compensation Fund, which pays unemployment claims, for modernizing its computer system and reducing call wait times to its centers, among other things.

Act 34, which went into effect in 2013, is scheduled to end Dec. 31, but department officials told legislators they needed it to be extended due to a continuous drop in federal funding.

Federal funding for unemployment centers is tied to state unemployment claims, and a 23 percent drop in initial claims from 2012 to 2016 led to a nearly $40 million decrease in funding during that same time frame, according to statistics provided by the department.

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A letter sent by the department to a Republican Senate caucus states that the decreased federal funding has already led to a staff reduction of more than 600 employees since the end of 2011, but Act 34 allowed it to avoid further reductions while improving its performance.

Sen. Christine Taglione, D-Philadelphia, originally proposed a bill that would have extended the fund for four years, providing an additional $275 million to the department.

Wagner voted in favor of that bill during a Senate Labor and Industry Committee meeting Sept. 26, but the bill stalled in the Senate Appropriations Committee, which also includes Wagner.

Jason High, Wagner's chief of staff, said committee members had expressed concerns with the bill at the meeting, but they agreed to move it forward so they could take a closer look.

The bill to extend the fund one year, providing $57.5 million, passed through the House, 175-13, on Oct. 19 before unanimously passing through the Senate Labor and Industry Committee on Oct. 24 and Senate Appropriations Committee on Oct. 25, though Wagner did not vote on it either time.

Session records show that Wagner was absent both days for "personal reasons." High declined to elaborate on those reasons.

In a recent letter to Senate GOP leadership, Wolf noted that Labor and Industry Secretary Kathy Manderino attended the Oct. 24 meeting to answer senators' questions.

Accountability: Wagner said he "dug (his) foot in" to prevent a vote on the Senate floor because the department needed to be held accountable for being given four years of funding with "nothing to show for it."

Wagner has been saying, and repeated during his news conference, that the department had been given $240 million during the last four years, but the department's letter to legislators puts that figure just above $178 million.

Labor and Industry spokeswoman Sara Goulet called Wagner's claim that no improvements have been made "abjectly false."

Goulet wrote in an email that the department has made significant improvements in customer service, reducing call wait times from more than an hour during November 2012 to less than 10 minutes during November 2016 and consistently making more timely payments on claims.

Wagner also talked during his news conference about recently visiting the Lancaster unemployment center, one that is scheduled to close, and how he was told there that the center was rumored to be closing in June 2017 regardless of receiving additional funding.

Goulet wrote that the department had not made any decisions about centers closing during 2017. The department had informed the Legislature it would need to consolidate one of the centers during 2017, but that wouldn't have required any furloughs, she wrote.

Laurie Haines, a supervisor at the Lancaster center, wasn't in the office during Wagner's visit, but she said the general feeling among her colleagues is that it was "obviously political," pointing out that Wagner made sure to tell everyone that he would be running for governor in 2018.

SEIU 668 member Laurie Haines, of York City holds up her sign in protest to Senator Scott Wagner's decision not to vote on House Bill 2375, as traffic goes by on N. George St. Wednesday, Nov. 30, 2016, in York City. Amanda J. Cain photo

They were not aware of any plans to shut down their center until Wagner told them, said Haines, who has worked at the office for 16 years.

Haines, who serves as a primary union representative for the center's employees, said employees are continuing to predominantly blame Wagner.

Wagner also pointed out during his conference that he'd been informed that the Altoona center, which is being closed, was the most efficient call center, questioning why Wolf's office would choose to close it over others.

Goulet wrote that the Altoona center is efficient in numerous areas, but efficiency was one of many factors considered, including the ability to deal with an increased call volume.

High said, regardless of the rhetoric being thrown around on both sides, the main issue is that the department couldn't tell legislators when they would stop needing to take money from the Unemployment Compensation Fund.

The longer the money is taken out, the longer it takes the fund to become solvent, meaning it reaches its intended goal, High said.

According to the department's letter to legislators, the fund is currently on schedule to reach solvency by 2026. If the department were allotted $60 million from that fund each year up until that point, it would reach solvency just a year later, in 2027, the letter states.

The letter also points out that the proposed bill had included a provision requiring the department to submit a report by Feb. 15, 2017, to Labor and Industry committee chairs describing its plan to eliminate its reliance on those funds.

The issue can be looked at again in 2017, but Goulet wrote that it's nearly impossible to have a plan in place to bring back the furloughed employees if the department is given more funding.

Haines said the last few weeks have been "devastating to everyone" at her office.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.