MADISON -- Wisconsin Senate Majority Leader Scott Fitzgerald and Assembly Speaker Robin Vos said Thursday, May 28 they hand-delivered a letter to Governor Tony Evers, urging him to "immediately correct" issues with the state's unemployment system amid the coronavirus pandemic, writing, "Time is short," with Wisconsin unemployment "soaring to a historic high of over 14%."
This, a day after Wisconsin Republicans sparred with leaders in Evers' administration during a sometimes heated legislative hearing Wednesday, faulting them for not doing enough to quickly process surging unemployment claims during the coronavirus pandemic.
The Senate labor committee hearing laid bare the partisan debate over who is to blame for the backlog of unprocessed claims. That backlog may continue into October, depending on staffing levels, Department of Workforce Development Secretary Caleb Frostman told the committee.
The unprecedented surge in unemployment claims caused by the pandemic resulted in a more than quadrupling of Wisconsin's unemployment rate to 14.1% in April, its highest since The Great Depression. The average number of weekly claims skyrocketed from 45,000 a week to 300,000.
As of Saturday, 2.4 million claims had been received but only about 1.7 million had been processed, according to DWD. Of the roughly 728,000 unpaid claims, about 11% were ineligible.
Republicans accused Frostman of not being prepared for the surge in claims and not doing enough when it arrived.
Below is the letter to Evers from Fitzgerald and Vos:
"Dear Governor Evers:
"With Wisconsin unemployment soaring to a historic high of over 14%, unemployment insurance has unfortunately become the mainstay of the hundreds of thousands of unemployed workers in the state. As you know, most private employers are taxed to finance UI benefits at a level based on the business size and their past unemployment experience.
"Act 185, signed into law on April 15, included a provision that required UI claims specifically related to the COVID-19 emergency not be charged to a contribution employer’s UI account for the remainder of 2020. Instead, the law required that these claims be charged to the balancing account, which is supported by interest on the UI Trust Fund and the solvency tax paid by employers.
"The purpose of this provision was to attempt to mitigate the huge tax increases that employers most impacted by the COVID-19 crisis would see as a result of the normal June 30 calculation. The employers who would see the largest tax hikes are the same employers whose businesses have been severely impacted and may struggle to keep their doors open even as the state begins reopening.
"It is our understanding that the Department of Workforce Development (DWD) has chosen not to follow these provisions of Act 185. To date, the Department has not submitted rules or even a scope statement for rules to address these changes in the law. As a result of DWD’s decision not to follow the law, impacted employers will now face the huge tax increase the legislation sought to avoid when the June 30 calculation is made.
"And while the Department is falling short of its duty to employers, it is doing no better for the unemployed. With a growing backlog of over 700,000 benefit payments, and fewer than 500 employees processing claims for the hundreds of thousands of unemployed workers, DWD is failing at its most basic mission.
"This is simply unacceptable.
"Your administration, DWD specifically, is charged with administering the UI program and following state statutes. The outrageous decision to break the law is made worse by the fact that in so doing, the department is making it even harder for the employers impacted by the health crisis to get their businesses open and bring their employees back to work.
"It is incomprehensible that the department charged with workforce and employment would mindfully act to make it harder for unemployed workers to get back into the workforce. Time is short. We urge you to immediately correct this situation and assure that this law is being followed and that the tax rates will be reflective of legislative intent, codified by your signature.
Sincerely, Scott Fitzgerald Robin J. Vos Senate Majority Leader Assembly Speaker"
During Wednesday's hearing, Frostman recommended that the state update its computer systems, increase the weekly unemployment benefit and permanently do away with a one-week waiting period to receive benefits. Republicans implemented the waiting period in 2011 but last month voted to waive it until February.
GOP Sen. Chris Kapenga bristled at Democrats' arguments that policies enacted by Republicans in recent years have made it harder for the unemployed to collect benefits.
“I don’t want to hear another person say it's all the Republicans' fault," Kapenga said. More state workers could be transferred to work on processing claims and to expand a call center so it can stay open around the clock, rather than from 7 a.m. to 5 p.m., he said.
Frostman said all efforts are focused on processing the claims faster. He testified that a 50-year-old computer system has “hamstrung” the state’s ability to process claims more quickly.
“One of the most glaring lessons learned coming out of the Great Recession was the desperate need to modernize the unemployment insurance base benefits system, yet Wisconsin is still saddled with one of the most antiquated and inflexible systems in the country,” Frostman said.
Wisconsin was the last state to begin issuing the $600-a-week in supplemental unemployment benefits from the federal government, according to The Hamilton Project, an initiative by the Washington, D.C.-based Brookings Institute. Wisconsin first began sending payments on April 29 and has paid over $870 million in benefits.
Noah Williams, director of the Center for Research on the Wisconsin Economy at the University of Wisconsin-Madison, said spikes in unemployment and the challenges faced in Wisconsin were not out of line with national averages. However, Williams said “other states have certainly done better in terms of processing claims.”
Also Wednesday, the state set records for the largest single-day increases in COVID-19 deaths at 22 and new cases at 599. The 10,330 tests administered was also a daily high. The percentage of positives out of all tests given was 6%, up from 4% the day before.
In total, 539 people have died from COVID-19 in Wisconsin and there are nearly 16,500 confirmed cases, the state Department of Health Services reported.
The records in deaths and new cases were reported exactly two weeks after the Wisconsin Supreme Court struck down Evers’ stay-at-home order, leaving a patchwork of local restrictions in place.
Andrea Palm, the state’s health secretary, said she couldn't say with confidence that the new cases are related to the state’s “safer at home” order being tossed out by the court. The Supreme Court on Wednesday dismissed a second challenge to the order as moot, while Evers announced a new $200 million grant program for local governments paid for with federal money.