Unemployment Insurance Advisory Council Meeting Minutes
Tuesday, September 9, 2008 – 11:00 A.M.
Marathon County Public Library
300 North First Street, Wausau Room
Management: Dan Petersen, Susan Haine, and Earl Gustafson
Labor: Dennis Penkalski and Patty Yunk
Chair: Daniel LaRocque
Department staff present: Andrea Reid, Tracey Schwalbe, Dick Tillema, Ben Peirce, Carla Breber, Troy Sterr, Mary Pronschinske.
Mr. LaRocque calls the meeting to order at 10:29 a.m.
1. Brief Remarks – Hal Bergan
Mr. Bergan is on vacation. Andy Reid, Deputy Division Administrator, updates the Council on revised projections for the trust fund balance. The last projection indicated a negative balance in March of 2009 of approximately $6 million. The benefit payout has been volatile this year. We have updated the numbers using the average of April, May, and June benefit charges from 2007, and compared to those months in 2008, made projections from that. That calculation shows that April, May, and June 2008 benefit payouts were about 12% over 2007. We projected the trust fund balance from that analysis. With these projections, in March of 2009 where we had originally shown a deficit of $6 million, we now show an approximate $21 million positive balance. If benefit levels were to exceed the projection by 3.5% for the period of time projected through March, that positive balance would be gone. Based on this projection, if we do go into a negative balance in early 2009, we would recover that later in the year with tax receipts. In that event we would avoid paying interest on any money borrowed from the federal government. However, starting in 2010, we would show a deficit again and would not pick up any significant increased revenue at that time. Mr. Tillema will be doing other projections using his model that extend to the first quarter of 2010. We are also looking at a Department of Revenue model and a federal model for use in making projections, but we are not comfortable with using those tools for this purpose at this time. Ms. Reid also hands out a graph depicting the benefit payouts. One assumption we are using is based on the data showing the 12% increase in benefits from 2007 to 2008 to do the projection displayed on the graph. How we do will depend on whether we see an economic recovery next year.
Question (Penkalski): Do these numbers include the federal extension benefits?
Ms. Reid responds they do not. The projected numbers are based on regular unemployment benefits paid. We had a significant increase of about 25% in benefit payouts in August which was triggered by the notices that were sent regarding the extended benefits program. As a result, many claimants filed regular benefit claims.
Question (Penkalski): What are the numbers on how many people have claimed extended benefits?
Mr. Ben Peirce provides the numbers: To date for July and August, the department paid 145,000 weeks of benefits and $35.5 million for extended benefits. Ms. Reid responds that in doing the analysis, staff found that there was a significant number of people claiming extended benefits that had been unemployed since 2006.
Ms. Reid also notes that the department has had another query from the reporter, Jason Stein, regarding the status of the fund and analysis of the impact of the technology projects on the fund. Ms. Reid is not sure there is any correlation, but he may be more interested in how it helps staff manage the fund. It does help with efficiency. We expect to respond to him by the end of this week and you may see an article in the press about this.
Comment (Penkalski): Maybe it would help to explain how many people were employed in UI 10 years ago compared to today.
Ms. Reid responds that when she started five years ago, there were 120 people in the Bureau of Tax and Accounting. When Mary was there, there were 155. Now there are 93 staff members. There has been a significant reduction in staff.
Comment (Haine): That is something that should be reported.
2. Minutes of Meeting June 5, 2008
3. Minutes of Meeting July 25, 2008
Approval of the minutes will be deferred.
4. Proposed DWD 136, Wages Exempt from Unemployment Insurance Levy
Mr. LaRocque updates the Council that the rule has been submitted to the Legislature and has been referred to committees. We do not anticipate any controversy with the rule.
5. UI Treasurer’s Financial Statements (Covered by Ms. Reid’s opening remarks.)
6. Letters to the Council
Mr. LaRocque indicates that department sent a letter to Representative Kerkman regarding the board resolution from the Village of Twin Lakes. The Village thought their police and fire commission should not be covered. In fact, the commission member was not covered, but the Village had failed to provide us with timely information to make that determination. They had reported the wages as if the individual were an employee.
The Wausau public hearing today will follow this meeting at 11:00 a.m.
The next Advisory Council meeting and public hearing will be held in Spooner on Thursday, October 2, 2008, and will begin at 11:00 a.m.
Mr. LaRocque introduces Mary Pronschinske, who will be responsible for planning UIAC meetings. Ms. Pronschinske indicates that the meeting in Spooner will be held at the Agricultural Research Station on Highway 70; the drive time from Madison is 260 miles or 4 hours, 12 minutes.
Meeting adjourned at 10:50 a.m.