Aid to state unemployment compensation system may be on its way

David Weissman
  • Bill to provide $15 million for state's unemployment compensation system passes Senate committee.
  • Labor department had requested $57.5 million last session, but Senate refused to vote on bill.
  • Department furloughed 500 employees and closed three centers, leading to increased call wait times.

After months of inactivity in response to major cuts to the state's unemployment compensation system, help might be on its way.

County residents needing to file for unemployment compensation are facing a long wait at CareerLink, Monday, Jan. 9, 2017. John A. Pavoncello photo

A bill authorizing an additional $15 million of funding to the state Department of Labor and Industry cleared the Senate Labor and Industry Committee on Tuesday.

If passed by the full Senate and House, the additional funds could allow the department to bring back many of its laid-off employees, at least temporarily.

The department furloughed nearly 500 employees and closed three offices late last year after the Republican-controlled Senate refused to vote on a bill that would have authorized $57.5 million in additional funding.

The layoffs have led to a drastic increase in call-wait times to unemployment compensation centers.

Opposition: Sen. Scott Wagner, R-Spring Garden Township, said that he had led the charge against holding a vote on the bill because of a lack of accountability by the department for the money already allocated to them.

The Legislature had allocated about $178 million in additional funding in 2013-16 for the unemployment compensation system, and nearly $170 million was spent before then to modernize the department's technology, which remains out-of-date.

State suing IBM over unemployment compensation tech

Gov. Tom Wolf announced earlier this month that his administration plans to sue IBM over its failure to fully modernize that system.

State Sen. Scott Wagner. Dawn J. Sagert photo

Wagner was one of four committee members to vote against the latest bill, which was introduced by the committee's chairwoman, Sen. Kim Ward, R-Westmoreland County.

Unemployed wait two hours to call for help on compensation

Wagner could not immediately be reached for comment.

Taking the lead: Ward said she believes her proposal would provide a good temporary fix while a long-term solution is configured.

The department issued a statement that it appreciates Ward for taking the lead on this issue.

"The department, along with the governor, would prefer a long-term solution for this funding, but this is a good step toward that goal," the statement reads. "However, a short-term fix alone could force the system into chaos again, and so the department will continue to work with the General Assembly to enact a long-term fix that stabilizes the (unemployment compensation) system and does not create a crisis."

State unemployment call system subject of House hearing

The department did not say how many employees could be brought back or for how long with $15 million, but Ward said the additional funding should get the department through  the beginning of November.

During recent Senate and House hearings, Labor Secretary Kathy Manderino told legislators that it cost the department $3.4 million per week to operate the unemployment compensation system under its previous allotment of staff.

Manderino also told legislators it would take three to six weeks for the system to get ramped back up if funding were approved. The closed centers in Lancaster and Allentown cannot be reopened because the buildings were leased, but the center in Altoona is still a state-owned property.

Pennsylvania Department of Labor and Industry Secretary Kathy Manderino speaks during a news conference in support of increasing the minimum wage to $10.10 per hour at Continental Square in York City, Thursday, March 24, 2016. Dawn J. Sagert photo

Ward said the temporary relief will allow the Legislature to consider the results of an audit currently being conducted by the state Auditor General's Office. The audit is expected to be completed by the end of April.

Other bills to provide $57.5 million in additional funding to the department have been proposed in the House and Senate, but Ward doesn't see either of them progressing.

"As things stand, (my) bill is the only bill that will put money into that system before a long-term solution is reached," she said.

Ward said she's confident the bill has enough support in the Senate to pass if it is brought for a full vote. The House had passed the $57.5 million bill last session, 175-13.

— Reach David Weissman at or on Twitter at @DispatchDavid.