The Oklahoma Employment Security Commission is facing a serious funding challenge if action is not taken by the legislature in the 2009 session. According to agency approximately 200 positions could be lost if the problem is not addressed.
In addition, the agency has experienced an increase in calls for unemployment claims and call center wait times are once again rising. At the September Commission meeting, UI Director Jerry Pectol reported that the number of new claims filed in June through August was up more than 11 percent, compared to the previous three months. The agency reported weeks paid is up by 20 percent.
The escalation in unemployment claims has increased call center wait times from an average of two minutes to over 17 minutes. The wait on Mondays can be several hours.
To try to clear the backlog, employees have stayed late and come to work early and have shortened the time between calls. Pectol reported that workers are doing the best they can, but are drowning under the increased number of calls and inability to get caught up.
“If we insist on not funding government, we will get unfunded government,” said Commissioner Mike Wester, an OPEA member, commenting on the lack of resources to help citizens in troubling economic times.
Federal Funding Running Out
The annual federal funding grants for the unemployment insurance and employment services have decreased from $32 million in 1982 to $25 million in 2008. When inflation is considered, the fund is almost $50 million short of 1982 levels. Without state funding, OESC has been surviving on federal Reed Act distributions which occur sporadically. Oklahoma received $81 million in Reed Act funds in 2002. These funds will be depleted during the 2010 calendar year. Currently, there are no discussions of a Reed Act disbursement at the federal level.
Without a new funding source, OESC could lose approximately 200 of its 700 positions, or almost a third of the workforce. To preserve jobs and maintain services at the current level, which is not keeping up with the demand, the agency would need $12 million in funding each year.
In addition to current service problems, the agency would be forced to cut back in reemployment services, fraud investigations and tax enforcement, if a funding bill is not passed next session. OESC has 35 offices across the state and five satellite offices. Loss of jobs and funding would force offices to close and citizens to travel farther for services in a time of sky-rocketing gas prices.
During the 2008 legislative session, Senator Debbe Leftwich and Rep. Weldon Watson proposed SB 1553 that would create an OESC Administrative Fund, which would receive six percent of the unemployment taxes paid by employers. OESC would be allowed to use $10 million toward administrative costs of the agency.
The Unemployment Trust Fund, which would normally receive all unemployment taxes has a healthy balance and has grown from $608 million in 2005 to its current level of $856 million. Diverting a small percentage of the unemployment tax would not affect the state’s ability to pay claims or raise taxes on state employers. In 35 states, employment services do not rely entirely on federal funds, but provide appropriations or earmark a percentage of unemployment taxes for the state agency.
“OPEA will be supporting legislation to fund OESC,” said OPEA Executive Director Sterling Zearley. “However, we are concerned that SB 1553 does not go far enough. In these challenging times, the state must have services that help workers make ends meet when they lose their jobs. More importantly, the state needs employment services to put people back to work quickly and help employers find a quality workforce. OESC should be adding staff and services, not cutting back.”
OPEA will be visiting with legislative leadership about this critical matter in the next few weeks. In addition, the association will host legislators in OESC offices to help them understand the critical services provided by the agency.
“If you work for OESC, invite your co-workers to join OPEA and help fight for your jobs and the services you provide,” concluded Zearley. “Also, talk to partners in your community, such as local businesses and chambers of commerce. They need to know that this important service is threatened.”
Posted on
Sun, September 21, 2008
by Trish Frazier