GEF 1 - Room D203
201 East Washington Avenue
Management: James Buchen, Dan Peterson, Susan Haine, Ed Lump, and Earl Gustafson
Labor: Dennis Penkalski, Patricia Yunk, Red Platz, and Mike Bolton
Chair: Daniel LaRocque
Department staff present: Hal Bergan, Bob Whitaker, Andrea Reid, Lutfi Shahrani, JoAnn Hium, Carla Breber, Ben Peirce, Dick Tillema, Christopher O’Brien, Tracey Schwalbe, Brian Bradley, Troy Sterr, Tom McHugh, John Zwickey, and Robin Gallagher
Others present: Larry Smith, John Metcalf, and Bob Anderson
Mr. LaRocque calls the meeting to order at 9:47 a.m.
There have been some changes in how workers compensation and unemployment insurance legislation are going to be handled. There are two new Labor Committee chairs in the legislature to work with and educate about the substance of what we do and the agreed bill process, Mark Honadel in the Assembly, and Spencer Coggs in the Senate. Mr. Bergan met with Representative Honadel last week. It was a very good meeting; he was interested in what we had to say. Mr. Honadel has a history as a small business owner so he has had plenty of direct interaction with the program. He has some opinions, but he seemed to be very open to what we had to say, and was attentive when we talked about the agreed bill process. It was a very encouraging meeting. Mr. Bergan also met with one of Senator Coggs’ aides. That was similarly a very good meeting. Mr. Bergan described the program in general terms of how many participants we have, how much money is involved, and identified issues that we routinely deal with and that we hear from legislators that legislators deal with, such as who is an employer, who is an employee, and who is an independent contractor. In both meetings, the response was very good. Part of the Division’s task over the course of the next few months is to reinforce those initial good contacts and also identify and make that information available to all committee members involved so they have good background to work with and know what we are about. Everyone has opinions about unemployment insurance but there are few legislators who are knowledgeable about the program, so part of the Division’s task is to create a base of legislators that know the UI program so when we come to them with legislation they have some idea of the context of that legislation.
The IT projects continue to be challenging. For SUITES (update of the tax system), the primary focus is on making the release deadline of December 2007, so the Division is identifying all the work that needs to be done and making sure that it brings to bear the amount of resources that are necessary to meet those various deadlines. For now, Mr. Bergan is feeling optimistic about that. The Division is doing most of this project with strictly state resources. It is a big release so we need to be wary about things that can go wrong.
Question: Is this change going to feel different for employers with the SUITES program? Is there anything employers should be prepared to do differently?
Mr. Bergan notes that part of the purpose of SUITES is to make it easier for employers. The major activity between now and the release date is testing and among the things we will be doing is putting some of this in front of some of our customers and getting some reaction from them. Mr. Bergan notes that the division also has been in touch with the large payroll groups so they have advance notice and that will make a difference.
ENABLES continues to be more problematic. The first release was very successful. It may have taken longer than we wanted, but as an aid to work flow, it has been very successful. The release the Division is working on now on the appeals side is more problematic, much more complicated. The Division is looking at that release and the overall project and making sure that it is a project we can do and one that is consistent with the resources we have available. In the past we have been fortunate in having substantial carryovers from our federal grant monies. Those carryovers are getting smaller so we will have to pare back our IT model to something more manageable and we are in the process of doing that.
For federal funding, it looks like we will be going through the entire fiscal year on a continuing resolution because we are not expecting to have a Labor Department appropriations bill. This means that the funding that we have been projected to get is the funding that we will get for this year, with a little reduction from last year. We are optimistic that we will do better next year based on the submissions we made and the federal funding formula. Our overall fiscal circumstance in the division is not as good as we would like it to be, so we may be back to you next time to talk about using the million dollars we talked about before for administration.
At the Division level we have begun to generate our list of law change proposals we will give to the Council in the next several months. That process has just begun and we are trying to focus particularly on those proposals that will simplify our process. We want to resist if we can the refining and complicating that has gone on in the past. Time will tell if we will be successful at that.
Finally, I encourage you, if you are ready, to take final action on the able and available rules at this time. We worked hard to give you a good substantive discussion on that. If there are still specific questions that you have, we are happy to try to address them. We would like to get them in place; we think they are an improvement over what we have now. If you do not feel you are ready to move on them today, please be as specific as possible in identifying any questions that you continue to want clarified before you act.
The Minutes of the September 19, and November 16, 2006 Meetings are approved unanimously.
Mr. LaRocque notes that at the last meeting, Mr. Lump asked for a write up of the adjudication process improvements Mr. Bergan discussed.
Mr. Shahrani hands out a summary entitled, “UI Adjudication: Adaptations and Improvements.” The Division mission is to pay benefits when appropriate in a timely fashion. The adjudication workload fluctuates with the seasons. Resources and staffing are barely matched to the workload. The Division is challenged to do more, faster, better.
The traditional adjudication process was a five-step process. First, we uncovered the issues coming to us from many sources (initial claims, review of claims, reports from employers, tips, and department staff talking to a claimant and finding an issue). The issues were moved to staff who “clarified” them. They made sure that the person was qualified and moved to the “investigation” phase. Investigation required us to schedule it and assign it to someone first-in-first-out. We scheduled for the next available spot. Many times during the year our schedule jumped to two or more weeks.
This past summer, we had cases scheduled four to five weeks out. That is not acceptable. If you cannot address the issue for five weeks, you are already very late. In the past we acquired limited term employees to help, called back retirees with expertise, worked overtime, assigned work to lead workers and supervisors and reached for every opportunity to mitigate the problem. We knew that something had to be done differently. Timelinesss is not a new problem or challenge; it has been ongoing.
The staff and management in the Eau Claire adjudication center started in the summer of 2005 to look at this more closely. Maybe the scheduling process is not optimum; maybe we can take the work as it presents itself to us rather than have it sit in the “clarify” step. Let the adjudicator decide if there is an issue and move it out. Let’s not have the schedule dictate when we do our work. Also, they decided that if we take up the issue on a “cold call,” we would save ourselves a lot of headaches. If someone receives a letter that says you will be called and interviewed in 2 or 3 weeks, they call the adjudicator or supervisor to complain because that they cannot wait because they need the money now. If we present them at least with the initial call to get the initial information and start the process, that saves a lot of complaints.
They also decided to try something else different as well. The “clarification” process called for us to send the form to the claimant and say here is the issue, here is the information we need from you, give us the answer and send it back. Present those forms and letters to the adjudicators and have them complete the case. In many situations they needed another contact, the letters came back incomplete, and some of the answers were not relevant to the issues because people like to tell their stories rather than be specific. They set aside this process -- and in stead focused on getting a list of the issues to the adjudicator and having the adjudicator clarify what is relevant and act on it.
They set up a pilot and a comparison group working under the old system, with similar size and skills, wanting to compare apples to apples. They discovered that the pilot group under the new process was able to do at least as many cases, most of them within 7 to 10 days; and they were able to meet quality and exceed the timeliness of the other group.
Under this new system, there is flexibility. There is no schedule. You just do work; pick up the phone. You can take additional work or it could wait because there is no one on the other end of the phone expecting that call at that time. If the adjudicator cannot get to it today, they can do it tomorrow without creating a problem.
Once the results from this pilot were aggregated, it was very clear that this was a superior system. We moved this process out to the other centers.
The Milwaukee adjudication center was also experimenting to find ways to expedite the process, to get to the claimant sooner, to get the work done. We had a lot of support from staff. It was done by demonstrating the benefits of the process, rather than forcing everyone. It was not an upper management decision for everyone to jump and do it this way; they were trying to let the results sell themselves. It also was somewhat informal. When we call someone 2 or 3 days after they file a claim, and say we recognize there is an issue and we want it resolved so we can get them a check, it is more informal and comfortable than receiving a letter saying we will talk to you in 2 weeks and if you are not there we will make a decision without you. We concluded that the process was successful and moved it to the other centers on a volunteer basis. We found more of our staff buying into this process. We pulled our schedule back within 7-10 days, but most of our work was being assigned off schedule with direct call or direct claimant contact.
Mr. Shahrani hands out comparisons of the preliminary results. This effort is not mature or final. We have to refine some of the steps and measurements.
The handout shows how we transitioned from week 34 in 2006 to week 52. Mr. Shahrani points to page two of his handout which contains a graph of adjudication issues, showing the number of issues for pending, scheduled and assigned cases from week 34 to week 52. This tells us that our assigned and pending work is aligned. We are capturing the work as we are assigning it and making the calls.
Improved timeliness has motivated the staff. The third page of the handout shows the percentage of cases resolved timely, within 21 days, from week 27 (at just below 50%), to week 52 (at just below 90%).
On the employer’s side, early experimentation was not great. We got to employers sometimes before they received the separation notice; they complained they did not have time to respond. We are more willing to allow employers time because we are not in a panic, we are not calling them near the last day. We are calling them early so we have time, accommodate requests for additional time, and come back for clarification.
We are able to provide better service to the claimants by early contact, starting the process, easing their minds to know that we are taking care of this and have a vested interested in getting it resolved. But we are more relaxed in that process and can offer both parties the opportunity to give us information and to do it in a timely manner.
We normally say if an adjudicator can do 45-50 cases per week, we are getting our money’s worth, plus. Now we are getting 60-65 per week; it is not pressured, it is relaxed and controlled. Adjudication is not mechanical. The rules and laws are complex, not obvious. You are dealing with people, issues, controversies, and facts that take two or more meetings. Talking early in the process provides more accurate results.
Comment: The report gives the Council insight. Mr. Shahrani has done a great job problem solving.
Mr. Shahrani commends his staff and management for doing the work.
Comment: The chart suggests there are 9,000 to 13,000 of these a week. Is that the total claims for a week or the claims with issues?
Mr. Shahrani notes that the 9,000 to 13,000 figure is for issues we have to resolve. Some claims result in no issues; some claims result in multiple issues.
Question: Have you tracked the outcomes of these issues as you transitioned to the new adjudication process?
Mr. Shahrani responds that he has not looked at the data as to whether we are denying or allowing more claims. That will be apparent when we look at the quality reviews. If our results are better on quality, it does not necessarily mean we are allowing or denying more claims. It means we are doing the right thing.
Comment: As you get more data, you will see whether there is any change in the outcome based on this. This is great work breaking out of the mold. Where people have always done something a certain way, it is difficult to change. Reduction of those voice mails, which are so stressful to the adjudicators, is huge.
Mr. Shahrani adds that we did not go after this to deny more or allow more because our objective is not to do one or the other. Our objective is to make sure that when we have a disputed claim, we adjudicate it correctly.
Comment: There are times when changing a process unconsciously changes the outcome. We need to look at that and have it as a statistical piece of information.
Question: I deal with people who lose their phone access when they lose their job. I would like to know statistically how many people you were not able to contact at all, to see if that is a problem. Also, I would like to know whether there is an evaluation of whether individuals feel comfortable with the telephone interview versus face-to-face contact.
Mr. Shahrani states for the last 15 years, interviews have been done by phone. The issue of someone with a telephone is not new. With the new process, if we find someone does not have a telephone, we go back and put it on the schedule or we send a letter telling the person that we are trying to reach them, and give them the phone number and contact person to call. Or we send a letter with questions seeking information and they can fax it or return it to us by mail. That has always been in our process.
Question: Is it different with cell phones? The concern is that cell phone service is shut off much more quickly for nonpayment than other phones.
Mr. Bergan notes that phone service is about the last thing to go when people cut back on expenditures. We are having very high rates of initial contact and a lot of this relates to the fact that people have cell phones. We can find them wherever they are, rather than finding them at home. Also, we have very good data about outcomes for 2005. We could take the 2005 data and query the database in the same way starting in 2007. Using the same parameters we used in 2005, in two or three months we can give you some comparison data and see if it has affected any outcomes.
Comments: If you are able to contact the claimant earlier in the process, intuitively it would be better information because it is closer in time. The program requires people to be available for work. Having access to a phone is part of that responsibility.
Question: For the data in each week it is the balance of cases in each category. They are not all new cases, correct?
Mr. Shahrani answers they are not all new cases.
Question: For timeliness, does the 21 days mean calendar days? Is the 87-88% the number of cases resolved in 21 calendar days?
Mr. Shahrani answers that 21 calendar days is the federal requirement. The percentage is the number resolved in 21 calendar days.
Mr. LaRocque thanks Mr. Shahrani and tells the Council the Department will follow up on the data request.
Mr. LaRocque explains that 2005 Act 86 contained a provision which would disqualify claimants for excessive absence or tardiness. There was discussion about this over the years and discussion with the Legislature. Act 86 provided that excessive absence without notice to the employer was defined as 5 instances, excessive tardiness 6 instances. Also, this included conditions on the disqualification; e.g., to disqualify the employer must have a written policy on attendance with essential elements in the policy as defined by statute, delivery of the policy to the employee, written evidence of delivery of the policy to the employee, a warning within 12 months prior to discharge on the issue of attendance, and a requirement that the policy apply uniformly to employees.
Mr. LaRocque has provided to Mr. Buchen and Mr. Neuenfeldt the submissions made to the Labor & Industry Review Commission (LIRC). The legal issue is the effect on the misconduct rule. The practical issue is the impact of the (5g) notice/attendance provision on disqualifications. Briefly, for the practical issue, (5g) has not come into play much. The number of claims resulting in disqualification with (5g) has been very few; we do not see many that rise to 5 absences and/or 6 tardies before they become a claim.
Legally, the effect on the misconduct rule has not been as intended. Our intent was that where the notice/attendance provision “applies” or results in disqualification, there would be no consideration of the misconduct rule. In other words, you do not try to find a stiffer penalty and disqualify for misconduct. That much is noncontroversial. On the other hand, where the notice/attendance rule does not result in disqualification, it was intended, as we stated forcefully to the Legislature, the misconduct rule in its old formulation will apply as it always had. In other words, the misconduct rule was not intended to be changed or affected by the creation of the notice/attendance rule.
LIRC has issued four decisions in cases where they have departed from that intent. LIRC is now more reluctant to find misconduct where they would have in the past because the notice/attendance rule has been injected into the statutes. They are looking at the penalties. For notice/attendance, the penalty is 6 x 6; for misconduct the penalty is 7 x 14 and exclusion of wages in the base period for benefits later. If you do not satisfy the notice/attendance provision, it probably does not satisfy the misconduct provision.
We have shown LIRC the legislative submission and testimony, but LIRC is still reluctant to find misconduct on cases that involve notice and attendance. Conceptually we have difficulty with that. Some facts in misconduct do not apply to the attendance issue in (5g), such as the intent of the claimant and circumstances of the discharge.
We made our arguments to LIRC; LIRC rejected them. We filed appeals in three of the four cases and will file the fourth case in circuit court. We are prepared to make the arguments before the circuit courts.
LIRC has also held that some of the facts in the case prior to the employer adopting an attendance policy are irrelevant even to the misconduct analysis. We have a hard time reconciling that with our own decisions and LIRC’s experience over the past 55 years or so. The intent was not to alter the misconduct rule.
LIRC’s decision makes no mention of all of the affidavit material we submitted, including excerpts of testimony from Mr. Bergan, Mr. Lump and Mr. Buchen. It contained a long recitation of the dialogue with the legislators prior to and at the hearing on the bill. Our position is that LIRC’s decisions are not legally sound, and that you have to look at the legislative history and weigh that in interpreting the statute.
The Department is optimistic about overturning the LIRC decisions. One case is pending in Waukesha County where an employer initiated the action; it is the first action filed. Additional cases are pending in Dane County. We hope LIRC sees the wisdom in not issuing further decisions until this issue is resolved by the courts, but they might not.
Question: Are the benefits being paid while the appeals are underway?
Mr. LaRocque responds that benefits would be ordered to be paid by LIRC in those decisions, but they are not final until courts have decided them. Benefits will not be paid, although some benefits may have been paid already. [Note: This is inaccurate. Subsequent discussions clarified that based on legal requirements and LIRC’s decisions allowing benefits, payments are being made where claimants are otherwise qualified.]
Question: If there were overpayments, will claimants be responsible for paying those back?
Mr. LaRocque responds that if payments were made, there may be overpayments involved.
Question: Were there any facts in any of these cases touching on Family and Medical Leave Act issues?
Mr. LaRocque and Ms. Schwalbe respond that they are not aware of any such issues in these cases.
Comment: It is hard to speculate why LIRC has taken a hard line on this issue, especially in light of the legislative history and the Department saying this is how we interpret it. If we have to fix it, we will look at that, but hopefully the courts will figure it out.
Mr. LaRocque summarizes that LIRC’s decision means that you look at the penalties and compare them. That is appropriate if you are looking at a statute that needs construction. There is an argument that when you look at the misconduct rule, you look at the statutes around it to see what it might mean. On the other hand, we have this overwhelming body of legislative history that shows what the legislature intended.
Comment: It is not a subdivision of misconduct. It’s a different provision.
Mr. LaRocque notes that the LIRC decision has also caused an operational peculiarity, as we do not know the boundaries of misconduct now. We have to consider a penalty provision while we also consider the facts of the case. We do not know how egregious the misconduct has to be now, and why misconduct is different now that we have a notice/attendance penalty.
Comment: Misconduct is not defined in the statute; it is defined in the case law. The more the Council can be clear in the statute about what the rights and responsibilities are, the better, and the less we rely on case law. Part of our interest in this has been to provide clarity. LIRC has made it worse.
Public Comment [Larry Smith, employer agent]: His clients’ experience with (5g) has been that it is so remotely applied because that number of “no-calls” just does not happen that often. Also, we have always had absenteeism as a misconduct issue, and it is really unfortunate that LIRC has done this. There may also be another case appealed to LIRC soon.
Mr. LaRocque notes that one of the reasons the department appealed all of these cases is to avoid having a final LIRC order that would bind the administrative law judges. It is confusing for ALJs.
Mr. LaRocque notes that the proposed change to the “able and available” rule has been discussed at length. We proposed this change first to accommodate the Council’s vote to eliminate the 50% threshold on available for work; that is part of this proposal. We also propose a parallel change on the able to work by eliminating the 15% threshold. We think this proposal puts us more in the mainstream. The net fiscal effect as calculated by Mr. Tillema is $600,000 annually.
Motion to approve proposed DWD 128 (the version of proposed DWD 128 handed out at the meeting) carries unanimously.
Mr. LaRocque explains that changes in at least six of the seven rule chapters are “technical” even in a conservative sense. The Department made needed changes that accumulated over the years. Mr. LaRocque points to a November 9th memo in the materials that summarizes six of the seven proposed changes.
Carla Breber summarizes the proposed changes. DWD 105 and 107 are extensions of the law that deals with whether a person is an employee or an independent contractor. The proposed changes correct the statutory references to the independent contractor statute and the correct subsection.
The DWD 145 rule deals with the active processing exclusions that we repealed in the last bill cycle. In DWD 120, we had a required notice by an active processing employer that had to be given to employees about the nature of that work being just during that season. Both of these changes are because they are obsolete.
The DWD 123 deals with required benefit reports. The change will delete or correct references to forms that we no longer use. The proposal clarifies what the required benefit reports are, when the employer needs to submit them, what information they need to supply, and what they need to do to file the report timely. The associated change in DWD 111 deals with one of the required benefit reports called an “urgent request for wages.” We send this to an employer when the wages for an employee are missing, such as for a quarter for a particular claim. The proposal eliminates the reference to a tardy filing fee on that report because we no longer collect that fee.
The DWD 130 involves wages for benefit purposes. The proposal would align the rule with a statutory provision defining “wages.” Proposed DWD 101, addressing wages for tax purposes, eliminates old references and obsolete language.
Question: We are approving this for a hearing, so if someone saw something in the interim before final approval it can be changed, correct?
Mr. LaRocque indicates that these will go to public hearing for public comment. We sift those and report back to the Council on the public comments and then the rules go to the Legislature. They can be revised before they go to the Legislature.
Motion to approve each of the proposed changes to DWD 105, DWD 107, DWD 120, DWD 145, DWD 123, DWD 111, and DWD 130 (as proposed in the meeting materials) carries unanimously.
Mr. LaRocque provides an update on this rule. This will be going to the Legislature soon. It is unchanged since the last report to the Council on this rule.
inancial Outlook – Wisconsin Unemployment Insurance Program
Report of Activities of the Unemployment Insurance Advisory Council – 2005-2006
Mr. LaRocque reports that these Department reports must be submitted to the Governor and legislative leadership biennially. One report is the financial outlook on the UI program. The other is a report looking back on the Council activities in the previous two year cycle.
Mr. Tillema summarizes the Financial Outlook report. The report has been approved by the Secretary but has not yet been submitted to the Governor and legislative leadership.
The trends we identified in the Financial Outlook two years ago continue. The insured unemployment rate (IUR) has been decreasing slightly from 2.9% in 2004 to 2.7% in 2005 and 2.6% in 2006. Although the IUR has been decreasing during that time, the reserve fund has not increased. We had approximately $775 million at the end of 2004, $750 million at the end of 2005, and $725 million at the end of 2006. The primary reason for this decrease is the increase in charges to the balancing account.
According to the official economic forecast used in preparing the state’s revenue estimates, the IUR will continue to remain in a narrow range of 2.7 – 2.9% in 2007 to 2011. The benefits under that scenario would range from about $813 million to $858 million. The taxes will average $676 million. As a result of benefits paid out exceeding taxes collected, the balance in the trust fund will continue to decline.
In addition to the standard range of outcomes that we provided, there is an additional scenario presented this year. Its purpose is to show what will happen if the experience of the last four to five years recurred, 2001-2005. This is not a severe recession, in 2001 the IUR was only 3.4%; in other recessions it reached 6% or more. The fund balance under the conditions in the new scenario did end up having a deficit of about $100 million in each of three succeeding years. Borrowing from the federal government would need to be undertaken.
Much of what is in the report we have talked about in the context of our trust fund study. So what is important now is for you to let us know how we can help you reach an agreement for measures to strengthen the fund as we move forward.
Question: What is the regular unemployment rate
Mr. Bergan notes that the unemployment rate is 4.7%.
Comment: It is interesting to see that we have settled into a benefit level that is $300 million more per year than it was in the late 1990s. In the late 1990s we were paying about $450 million in benefits. The good economy and lower unemployment rate in the late 1990s explains this somewhat, but that is a fairly big gap.
Question: The official forecast seems to imply that 2007 will be worse than 2006. Would that be a fair characterization?
Mr. Tillema responds this is correct. In 2007, the IUR is predicted to be 2.8%. Mr. Tillema notes that he has located the regular unemployment rate predicted for 2007 is 4.6%, so it is probably about 4.5% now. The official forecast is usually made in November and published in December. Mr. Bergan notes that in the middle of the year this is sometimes adjusted based on what is actually happening.
Question: The data we have for 2005 and 2006 is actual data not forecasts, correct?
Mr. Tillema responds that this is correct; the 2006 data is very close to actual. We need to make some final calculations.
Question: Scenario C in the report is based on recent experience, correct?
Mr. Tillema responds that this is correct.
Mr. LaRocque indicates that the other report is the Report on Council Activities which is fairly self-explanatory. We did dress up the first part of the report a bit to restate the background of the Council and highlight some advantages of the Council process.
Mr. LaRocque notes that these reports will be submitted very shortly to the Governor and the leaders of each house of the Legislature.
Comment: In the past, the Labor committees in both houses would sometimes have a joint hearing at the beginning of the bill cycle. It was an opportunity for us all to come in and explain the process and tell them what a great process we have, that we are all committed to it and if they have issues to let us know, and to let them know some issues we were thinking about, etc. That is a good legislative relations exercise. We are now trying to persuade the new chairs that this is a good idea, so we may have such a hearing.
Question: Where is the list of excluded employers in the statute?
Ms. Breber responds that this is in section 108.02(15) in the definition of employment.
Mr. Bergan notes that we have spent time in previous meetings to bring the Council up-to-date on issues relating to the trust fund. We are willing to do more of that, but at this point, we would like to hear if there are particular issues the Council would like the Department to address. The prescription in the bill is to have the trust fund study completed by July 1st. We have plenty of material already in generating the biennial report. The intent now is to generate the trust fund study and make it as analytic as possible. A lot of information is in the report to the Legislature. Mr. Tillema did a particularly good job of explaining how this works in that report.
In the trust fund study, we will show why in good economic years we have been losing ground. Also, we would offer a series of policy alternatives to the Council instead of a single prescription, a menu of alternatives that the Council can use in negotiations. Is that acceptable to the Council or is there some other format that would be more helpful?
Question: For example, if you mean that one of your recommendations or options may be to do something with write-offs, would we be able to discern from the report what kind of money that would generate, e.g., if you had a 50% or 100% write-off, etc.?
Mr. Bergan responds yes. The pricing of those and costing them out would not need to be done by July 1st. Maybe after you see the list of options, there are other things you want.
Question: Is the requirement to report to the Council by July 1st?
Mr. Bergan responds yes.
Question: We are not going to wait until July 1st, are we? If we are going to deliberate on this and come to an agreement, we may want the bill to be done by July 1st.
Mr. Bergan responds that we do not have to wait until July 1st. The timing to have a bill done by July 1st would be ideal, but it has not been our history.
Question: As part of the option piece of the report, can you say what you did last time for funding issues as a comparison?
Mr. Bergan responds that the Council did not do anything on funding or revenue in the last bill cycle.
Comments: At the last bill cycle we asked for the study to get suggestions to keep the fund solvent. Previously, we were building up a surplus and there was pressure from employers to lower tax rates. We explained that if you have a recession, the situation can change very radically. Now we are in a situation where the fund is where we are paying out $300 million more than we are taking in and we are in an ok economy. So this issue is here, there is no question about it.
Mr. Bergan indicates that in the trust fund study we will try to indicate reasons for why this has happened, but the reasons may be policy decisions that the Council made for good reasons and does not want to reconsider. In that case you have to look elsewhere. The equation is working for this economy but it will not work if we have a recession, which we inevitably will. Are there particular substantive questions that the Department has not addressed so far that the Council would like the Department to address in subsequent meetings?
Comment: We should look at the triggers for tax increases and decreases. Also, we should look at the taxable wage base which has not been raised in 20 years. Maybe we should tie it to the federal minimum wage raises and take it off the Council’s back because the taxable wage base would be raised automatically.
Mr. Bergan notes that in light of the Council’s interest, the Department will try to get this to them before July 1st. In the meantime, the Council should let him know if there are topics it would like researched.
Comment: Timing will be a balance so the Department does a competent job on the report and the Council can have the Department’s perspective and view on the system as the Council begins their negotiations. Certainly July 1st would be late in that process.
Question: Are the Department’s proposals done yet? The sooner we have the Department proposals the better.
Mr. Bergan responds that no, but we have a good understanding of the alternatives and ways to approach this. We will put this on a faster track. We should talk about the timing of getting the negotiations done so we can get the agreement to the drafters.
Comment: In terms of orderly consideration, we should have the Council’s work done by the beginning of August so the drafters have time with it and it can be considered in the fall. We pushed it to the limit last time.
Mr. Bergan summarizes that the Council wants to have an August 1st deadline as a goal for the Council to conclude their deliberations and get the agreement to the drafters.
Comment: The Council should work to get their proposals to each other by April/May.
Next Meeting Dates
Future UIAC Meetings will be at 9:30 a.m. on the following dates:
Meeting is adjourned at 11:32 a.m.
Updated March 25, 2013
Unemployment Insurance Division, Bureau of Legal Affairs (BOLA)