(Interesting stuff. Bumped. - promoted by Thomas)
It is not enough to say Indiana's Unemployment Insurance (UI) Trust Fund is insolvent, as the governor and his Department of Workforce Development (DWD) have and will deflect this by saying 1.) This is a recession and 2.) But Michigan, California, Ohio, New York and Illinois' funds are much worse than ours! Those states' funds are worse, but those states are also much more heavily populated than ours.
No, the best way to look at DWD's UI problem (and having one of the worst UI programs in the country) is by digging into the truths that have not been appearing in the media and have not been sent-out in press releases by the governor's press representatives at DWD and elsewhere. Most of the information below is open for public inspection (after all, as some of the "Lead Team" at DWD forget, they are a public agency).
I would, therefore, like to put some of the pieces together for whomever would like to see.
1). Indiana was the third state to have an insolvent Trust Fund (Michigan's went insolvent in 2007, South Carolina's right before ours) during the current recession (we went insolvent in Nov. 2008). Next year, Indiana (along with SC) will have an increased federal UI tax for employers, who will have to pay $21 more/per employee (undoubtedly causing more lay-offs/terminations).
2). How did IN's Trust Fund get so low so fast? Since 2000, as is known by now, benefits were increased (our weekly amount is still not very high at $390/week, although Daniels said it was "Rolls Royce" high) and taxes on businesses were severely reduced. In 2005, Indiana had a Trust Fund balance of $600,000,000 or so; by November 2008, Indiana's fund was bankrupt, and currently, the federal government is bailing-out Indiana with $1.7 Billion (and expected to be over $2 Billion by the end of the year).
Did the recession cause this massive loss of money? Oh, surely it was a major factor; but, incompetence and corruption at DWD have also drained the fund of hundreds of millions from the fund with no oversight by Daniels at all. In 2008, DWD was responsible for OVER-paying $261 Million to claimants who did not deserve to be paid UI benefits (an error rate of 26% of the total amount of benefits for all of 2008). This amount was the highest in the US and $150 Million more than the next closest state, New York.
(http://workforcesecurity.doleta.gov/unemploy/bqc.asp)
Click on "Agency Responsible Overpayment by cause - all states".
2009's numbers should be out soon, and I can guarantee the loss of hundreds of millions of dollars from the Trust Fund due to incompetence and negligence at DWD will be to blame.
The people running DWD (none of whom have been with DWD more than 4 years and none of whom worked their way up, but were instead appointed by the governor) have been warned numerous times of problems by inside staff (who DO have UI experience), the US Department of Labor who oversees DWD, the US DOL's Inspector General who did an investigation of ethics problems, the Indiana State Board of Accounts who did an audit last year, and the Indiana Inspector General's office who completed an investigation in December last year and cited many ethics and accounting problems.
3). Indiana's DWD is being sued by the ACLU of Indiana because of poor UI Appeals backlogs (people waiting months for an appealed hearing). The backlogs are certainly caused because the initial-level "adjudication" is THE WORST in the country, and has been among the worst in the last 3 or 4 years. In the first quarter 2010, Indiana had the worst adjudication quality scores for separation cases (firings, voluntary quits, etc.) and non-separation cases (work searches, vacation pay, pensions, etc.). Out of 100 randomly-sampled issues, Indiana's "Adjudication Center" got only 18 correct.
So if you file for unemployment and receive a determination stating whether or not you should get UI, could be an 82% chance your determination is wrong!
(http://workforcesecurity.doleta.gov/unemploy/ranking.asp)
Check the boxes for "Nonmonetary Separation Quality" and "Nonmonetary Nonseparation Quality", and be sure the quarter is from January 2010 to March 2010. You can also do any quarter this way and see that Indiana's has been bad for the last 4 years and getting worse.
There are many good lay-people working at DWD and especially with UI, but the training is poor (there is no standardized training program for claims adjudicators), claims deputies/adjudicators are still held to a de facto, very high quota to "take care of issues quickly", and the focus on quality has only somewhat recently come-up (but is still being done poorly). Nepotism and cronyism are big at DWD, which is impactful, and anybody with ideas or suggestions to improve the system (who are not sycophantic brown-nosers) are deemed radicals or troublemakers and are punished, harassed and terminated (there have been many people canned from DWD just to shut them up).
So if anyone out there buys the lines of "the recession caused the Trust Fund debt" or "we're doing better than other states", need to be told what I have provided above and educated about what the people running DWD have done to the UI program. Under Governor Daniels, DWD has developed one of the worst workforce development agencies in the country. The Governor has assigned friends from high places or good connections, not to mention former staff members, to run DWD, and they have run it into the ground.
When the Indiana UI program is this bad, businesses, claimants and taxpaying citizens are the ones punished for it with higher UI taxes, denying claimants who should have been paid UI, and costs that are passed on to taxpayers as well. Every Hoosier needs to remember this has happened SOLELY on Governor Daniels' watch. DWD's UI program is the antithesis of "fiscal conservatism" and is a disgrace to the laws and regulations of both the US government and State of Indiana. |
