Funding cuts could reduce staff to handle unemployment claims

Funding cuts could reduce staff to handle unemployment claims »Play Video

BAKERSFIELD, Calif. (KBAK/KBFX) - Funding cuts could mean job losses at California's unemployment offices. The Employment Development Department is getting fewer federal dollars to administer that program, and officials admit that could mean reduction in services to the public.
 
"We are losing staff, what we're trying to do it to avoid layoffs for the first time in our history here at EDD," Loree Levy told Eyewitness News from Sacramento. "That really is going to require our staff to do as much as possible to find savings and efficiencies in our operations."
 
EDD faces a $150 million shortfall in funds from the feds, Levy said. That's the money used for administration of the unemployment - in other words, that pays for the staff.
 
"The possibility is yes, as we lose funding, and we lose staffing, that it certainly will have a major impact on our ability to provide critical unemployment services," Levy said.
 
For about a year, Eyewitness News has investigated viewer complaints that they can never reach EDD with questions about their unemployment claims. Many said they call EDD repeatedly and never get through on the phone lines. So, additional staff losses are not good news.
 
In May, EDD changed the phone service system. Levy said they put all available staff on the phones but made the service available only from 8 a.m. until noon.

"That's actually helped us keep up with some of the phone service," she said.
 
But, EDD also encouraged customers to make more use of the online services. That's still the best advice Levy has, and she said there will be more improvements to the online services this fall.
 
The federal funding cuts will not affect benefits.

"Regular unemployment benefits will continue to be paid," Levy said. She said funding for benefits come from employers paying into the state unemployment trust fund and some federal loans. It's the costs of administering those benefits that are paid for by the federal money.
 
Those federal cuts also do not affect the disability insurance programs, Levy said.
 
That's why some of the EDD staff now working in the unemployment program may be shifted over to work in the disability side of the operation.
 
Levy said the department is trying to make the most of the federal dollars they're still getting for administration of unemployment claims. She said they're consolidating some offices and reducing overtime.
 
The federal funding is being cut because of sequestration and because California's unemployment rate is down. But, EDD comes out on the short end of that equation, Levy said.
 
"We're getting far less money from the federal government that we have ever," Levy said. "Then you couple that with the fact that demand for benefits remain twice what it was before the recession, and that spells out for us an extremely huge challenge in trying to keep up with delivering these critical unemployment insurance services."
 
Levy says while Californians' demand for unemployment benefits is down 37 percent from this time last year, it is also 116 percent above the level in 2007 before the recession. The current unemployment rate in the state stands at 8.7 percent, at last report.
 
EDD suggests that customers use their online systems. It's not clear how much impact the funding for staff will affect serving the public.
 
"What's really at risk here is the funding source supporting the unemployment insurance program," Levy said. "And, that's where we're facing significant issues in trying to preserve any kind of service level."