UI modernization requires more than funding
States need more than a one-time cash infusion to support continuous modernization of unemployment insurance systems.
Thanks to $2 billion in funding in the American Rescue Plan Act, states can start modernizing their legacy unemployment insurance benefits systems. State leaders, however, say that funding and federal involvement isn't enough.
New Mexico modernized its UI system in 2013 and has tried to pursue continuous modernization and improvement since then, said Sue Anne Athens, CIO in New Mexico's Department of Workforce Solutions, at an event hosted by GovExec. Unfortunately, federal funds can't necessarily be used for continuous improvement, which can be a "constraint," she said.
"I think there is this vision that there'll be a great modernized system that the feds can come up with," she said, but “at the end of the day, the state owns the UI system. It owns the processes. It has the subject matter expertise on the ground."
In Georgia, Labor Commissioner Mark Butler said, state workforce agencies’ funding cycles also present hurdles to IT modernization and management. Generally, state workforce agencies get less funding during economically prosperous times, when fewer people are applying for UI, he said.
"We're the opposite of everything else in government," he said. "Our funding formula is probably 35 to 40 years old and it's mainly based on the number of claims being done."
Right now, Georgia's workforce agency is "flush with cash," Butler said. "Since March of 2020, money has not been an issue." His office is using the resources to hire staff, but he's already thinking about when these funding resources might fade when the crisis ends, Butler said.
Although New Mexico and Georgia aren't in need of UI tech overhauls, Athens and Butler said that some of the federal Labor Department tech portals that states access could do with some updates as well.
"We're still tied to some of the federal systems, which are lacking in modernization," Athens said.
Athens did say she would welcome federal help with identity management and fraud prevention, issues that have shot up during the pandemic with soaring numbers of fraudulent claims.
This article was first posted to FCW, a sibling site to GCN.