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JFAC debates unemployment-insurance operations funding; initial addition fails but accounting correction passes
Summary
Committee questioned whether to add dedicated funds for Department of Labor unemployment-insurance operations. A motion to add $7.33 million failed in roll call; later, the committee approved technical accounting transfers to correct fund balances for prior fiscal years.
The Joint Finance-Appropriations Committee spent time Friday discussing the Department of Labor's request for additional dedicated funding to support unemployment-insurance operations and IT replacement items. Members focused on staffing (full-time positions), the sources of dedicated funding, and the effect of low unemployment on operation revenue streams.
Representative Handy (motion maker) described the $7.33 million request as funding drawn from the unemployment-security administration fund interest earnings and said the department relies on those dedicated balances when caseload and federal funding decline. "People are not sitting around eating bonbons just because unemployment is low. They are still very busy," Handy said, noting the division had shed positions through attrition since the COVID surge in claims.
An initial motion to add $7,330,000 from dedicated funds and $161,001 in federal funds for IT hardware failed to secure the committee majority in a roll call earlier in the meeting. After committee members and staff identified accounting errors in fund balance records for FY2024, members returned later in the session and passed a corrective transfer motion: the committee approved transferring $4,868,000 from the Unemployment Security Administration and Reimbursement Fund to the Employment Security Fund to correct FY2024 accounting. That transfer passed on a unanimous recorded vote (18 ayes; roll calls showed 10 ayes in Senate and 8 in House in the final tally).
The committee also approved four pieces of language directing the Department of Labor to work with the state controller to correct fund balances and requiring a report on positions; the language and the corrective transfers were described by staff as "bookkeeping" corrections rather than new spending.
Committee members asked the department to report on positions and the department's plan to manage staffing and fraud-investigation workload. Some members expressed concern the department had been overstaffed during COVID but noted attrition had reduced headcount by roughly 40 positions since the peak.
The accounting corrections and reporting language passed; the budget addition request to increase operations funding did not pass in the committee earlier in the morning.
