State workforce agencies have funding for unemployment modernization and administration thanks to pandemic relief legislation but there are policy impediments, experts said.
States appear poised to solve the problem of obsolete and buggy technology hindering the delivery of unemployment insurance benefits, thanks to $2 billion in funding in the American Rescue Plan Act. But state leaders say that funding and federal involvement isn't enough.
"I think there is this vision that there'll be a great modernized system that the feds can come up with," said Sue Anne Athens, CIO in New Mexico's Department of Workforce Solutions, at an event hosted by GovExec. She noted that federal agencies that themselves have outdated tech in need of modernization and pointed to policy issues that can impede delivery at the state level.
"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," she said.
New Mexico modernized their UI system in 2013 and has tried to pursue continuous modernization and improvement since then, she said. But Department of Labor funding can't necessarily be used for continuous improvement, which can be a "constraint," she said.
Mark Butler, Commissioner of Labor in Georgia, said funding cycles for state workforce agencies themselves can present a hurdle to IT modernization and management. Generally, state workforce agencies get less funding during economically prosperous times, when less people are applying for UI, Butler 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."
That can lend itself to a modernization effort tied to funding levels that change over time based on the economy, Athens said. Right now, Georgia's workforce agency is "flush with cash," Butler said. "Since March of 2020, we money has not been an issue."
His office is using the resources to fill hiring needs, but he's already thinking about when these funding resources might go away 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 DOL's tech portals used by states themselves could need some updates as well.
"We're still tied to some of the federal systems which are lacking in modernization," Athens said.
Athens did say that she would welcome DOL help with identity management and fraud prevention, issues that have shot up during the pandemic with soaring numbers of fraudulent claims.