Escalation continues in UC call center funding skirmish

Harrisburg – As a Dec. 19 furlough date looms for nearly 600 employees within the Department of Labor and Industry – and three unemployment compensation call centers will stop taking calls – the skirmish over who is to blame for the lack of funding for UC technology upgrades and to replace federal funding to maintain the 2016 status quo continued its escalation into the first full week of December.

To recap, prior to adjourning for the end of session, the Senate declined to take a final vote on House Bill 2375, legislation that would have extended $57.5 million in funding to the Department of Labor and Industry to continue technology upgrades and provide funding to the department in an absence of promised federal funds.

The funding was marked as a fifth-year continuation of the Service Infrastructure Improvement Fund (SIIF), which was first created in 2012 to help with technology upgrades at UC call centers to improve processing time and create other efficiencies.

Under the 2012 law creating the fund, the automatic funding – which, to date, has totaled $178.4 million – was scheduled to sunset in December 2016.

Seeing the funding was going to statutorily expire unless reauthorized, the Wolf administration began pushing for an extension of funding in January, citing the failure of IBM to properly upgrade UC call center technology, thereby causing a delay in scheduled project completion and a lack of federal funding as the reason for requesting the extension.

After a four-year extension failed to gain legislative traction, an extension that would apply merely to calendar year 2017 was proposed in September 2016 and enjoyed largely bipartisan support in the House and two different Senate committees where it received a unanimous affirmative vote.

Though it was positioned for a final vote in the Senate before the chamber recessed prior to its break for the November General Election, it was not called up for a vote.

When the Senate returned after the election for a day of internal reorganization, the bill was initially scheduled for a vote, but was later pulled after Senate Republicans emerged from an internal caucus discussion declining to bring up any bills poised for final passage up for a vote for the remainder of the session.

Key to their determination, it was noted at the time, was a longstanding tradition of not holding votes in “lame duck” post-election session, a desire on behalf of Senate Republican members to – if the calendar was opened in any way – hold votes on other, more controversial bills. This included a bill that would have put new restrictions on abortions and, in what GOP leaders later said was the most important consideration relating to House Bill 2375, a lack of justification on the part of the Wolf administration as to why the funding is needed and an articulated exit strategy from the utilization of state funds for the now-late technology upgrades and lack of promised federal funding to the department.

Within days of the legislation not being approved, the department announced nearly 600 employees within the department would be furloughed and call centers located in Allentown, Altoona, and Lancaster, as well as the Harrisburg overflow call center, would be closed as a result of not authorizing the funding extension.

Following that announcement, Sen. Dave Argall (R-Schuylkill) was joined by Rep. Jerry Knowles (R-Schuylkill) in asking the Attorney General, Auditor General, and Office of Inspector General to look into how funding over the last four years has been spent and why the closings and furloughs are needed.

“We cannot continue to allow the bureaucracy to spend over $50 million each year without any oversight,” Sen. Argall said in a statement. “The department has known since 2013 that this funding would end, so the sudden need for all of these staff furloughs is beyond me.”

Then last week came an exchange of missives between Senate Republican leadership and the Wolf administration.

Senate Republicans urged the governor to utilize other means to avoid the furloughs and closings while doubling-down on their assertion that the administration failed to provide adequate justification for the extension prior to its scheduled final vote, particularly as it relates to a plan to no longer utilize state funding in the future.

“If the administration assumed that the Senate would just extend and increase the funding without additional accountability, that was a serious misjudgment,” they wrote. “Our members have consistently shown a high commitment to greater public accountability when considering spending requests; they want to see what has been done with existing dollars in weighing requests for additional money.”

They panned the decision to close call centers – particularly the ones identified for closure – as the governor politicizing the situation. However, they said, they would remain open to analyzing the situation if appropriate justification is provided.

The Senate GOP letter prompted a reply letter from Gov. Tom Wolf that attached memos and instances from 12 different meetings between his administration and members of the Senate or staff regarding the need for additional funding.

“All told, countless meetings were held with members and staff of your Caucus, and significant documentation justifying reauthorization as well as the ramifications of letting SIIF sunset was provided,” the governor stated.

Regardless of the governor’s public proffer of once-internal discussions regarding the issue, Senate Republicans continued to claim the justification noted by the governor was still inadequate.

"However, we maintain - as we have for many months - that the administration's public accounting should include specific projects, expenditures, and timelines, as well as a detailed plan outlining future transfers, and a timeframe for elimination of extraordinary funding," said caucus spokesperson Jenn Kocher in response to the governor’s letter last week.

"Unfortunately, to date, we have yet to receive that and this letter rehashing the history of their communications with us does nothing to move that forward."

While the letter exchange was taking place, the Service Employees International Union – the labor organization representing department employees – organized protests at legislator offices and call centers slated for closure seeking to change the minds of lawmakers.

“Watching friends be informed they were losing their jobs for no good reason was one of the most difficult experiences of my life,” said Bill Wilson, Chief Shop Steward at the Harrisburg Overflow Center, in a statement. “Our elected officials should do right by their constituents and put these hardworking public servants back to work.”

The skirmish between Senate Republicans and the Wolf administration has continued to escalate.

Monday, Sen. Scott Wagner (R-York), who has been a vocal critic of the need to extend funding and the subsequent announcement that the lack of funding has left no other option but to furlough employees and close call centers, announced he has filed a Right-to-Know request to seek information about the administration’s rationale about why they needed to close the call centers and which call centers to close.

“I believe it is imperative today for what I believe will be a full vetting process of this issue as soon as the Senate reconvenes,” he said in a Monday press conference announcing his filing.

“Gov. Wolf is a failed governor that is seeking to salvage his political career and he’s using the livelihood of state employees as pawns to do so. This is not only wrong for these employees, but it’s bad for Pennsylvania.”

Sen. Wagner stated the impetus for further investigation came during an unannounced stop at the Lancaster call center – one of the three slated for closure – where, he alleged, employees agreed that politics is the motivation behind the closing.

“What I learned was shocking,” he said. “Many of the employees agree with my colleagues and I that these closings are purely political. I was told that employees had been hearing for months that the Lancaster call center may be closing in June of 2017 anyway.”

Notably, Sen. Wagner sat on both the Senate Labor and Industry Committee and the Senate Appropriations Committee last session, both which voted to approve the measure unanimously. However, Sen. Wagner’s vote was not recorded as he was on leave during the proposal’s consideration.

Earlier in September, however, Sen. Wagner voted in support of Senate Bill 1335, legislation that would have extended SIIF funding through 2020.

Sen. Wagner’s announcement prompted the immediate ire of Democrats who argued Republican claims about the lack of justification for not extending the funding and positing a political rationale for call center closing is a smoke-and-mirror attempt to deflect blame off of them for deciding to not take up a bill that enjoyed bipartisan support despite knowing the implication that it would result in the furloughing of employees just before the holiday season.

The governor’s office, in direct response to Sen. Wagner, didn’t mince words with how they viewed his request Monday.

"Sen. Wagner led the charge to stop a vote on House Bill 2375 – which would have funded the system – and thereby decided to make it harder for working-class people who have lost their jobs to pay their bills, put food on the table and find new opportunities," said spokesperson Mark Nicastre.

"Every single unemployment insurance payment that is delayed and call that is not answered is unfortunately due to the lack of action by Sen. Wagner and others who failed to pass this bill before the legislature broke for the holidays, despite clear warnings of layoffs from the department if they neglected to vote on the funding."

Following Wagner’s announcement Monday came a letter from Sen. Lisa Baker (R-Luzerne) that asked the Office of Auditor General to look into how past monies were used within the UC system.

She argued the independent examination is needed due to the Wolf administration’s lack of appropriate justification for why the funding extension is necessary and why the chosen call centers were closed.

“The funding request is an indication that the centers and the personnel are necessary parts of the system. Yet threatened action to close centers and furlough employees suggests they are not essential. And to close what is reportedly the most efficient center in the first round raises a question of how much emphasis the administration places on worker performance,” she said in the letter.

“These, too, are concerns your independent review can resolve.”

Of note, Baker was one of three signees of a letter Senate Republican leadership sent to Gov. Wolf in late November urging him to reconsider the furloughs and utilize fund transfers to keep the centers open and employees hired until the legislature can fully vet whether additional funding is needed when it reconvenes in January. She also voted in favor of House Bill 2375 in the Senate Appropriations Committee and voted in favor of Senate Bill 1335 in the Senate Labor and Industry Committee.

Auditor General Eugene DePasquale, for his part, said Wednesday that he will not immediately get involved in the matter, but would announce the manner and scope of his involvement in early January.

“I have received several requests for audits on this issue and I am taking all of them seriously. I will be meeting with all of the interested parties in the coming weeks so I can come up with a solid plan for how I can help," he said in a released statement. “I will announce my final decision on the audit requests in early January.”

With the constitutional end of session having just passed, all legislation – including funding reauthorization – must start anew when the legislature returns in January.

The General Assembly’s first scheduled session day is Jan. 3, 2017, and it is not expected to take up any legislation until late January at the earliest.

Jason Gottesman is the Harrisburg bureau chief for The PLS Reporter, a non-partisan, online news site devoted to covering Pennsylvania government.