Unemployment Benefits Stuck in Transition

By Dana Knight
The Indianapolis Star

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October 9, 2005

MARTINSVILLE, Ind. -- Supper at Shirley Barger's house has been downsized to bologna sandwiches. On a good night, the menu might feature cornbread and beans.

After working as a title clerk at an auto dealership for 10 years, Barger finds herself in a surreal world -- saving every penny she can, researching debt consolidation and wondering how she will pay the bills.

"We're not destitute -- yet," said Barger, 50, of Martinsville, who lost her job in April. "But I feel sorry for the people who are."

Barger is one of nearly 20,000 jobless Hoosiers whose unemployment claims are backlogged at the Indiana Department of Workforce Development. Paperwork has piled up since a centralization of the unemployment insurance offices in May that cut the claim-processing staff from 120 to 41.

Barger's been waiting more than five months for a ruling on whether she's even eligible for unemployment. Others who are jobless wait as long as 10 weeks for a check that, according to federal guidelines, should have arrived in three.

The centralization has not only affected the jobless awaiting checks, it has also cost some state workers their careers. And it has left employers vulnerable to higher unemployment-insurance premiums in the future if the state continues to miss its deadline.

"I'm just one of many whose lives have been screwed up due to a really stupid decision," said Barger, whose husband, Gary, a pipe layer, will soon be entering the unemployment-claim frenzy as his seasonal work ends. "I'd like an answer to why this happened."

Workforce Commissioner Ron Stiver takes responsibility for the centralization of the agency, which handled $723.8 million in claims for 263,548 jobless people last year. He said he's concerned about jobless Hoosiers, but he also believes the agency he inherited in January is in dire need of repair.

"The levee was ready to break," he said. "There was a deep sense of urgency to get things fixed."

When Stiver took over nine months ago, the agency was $2.5 million in debt, he said. He immediately went to work to cut costs -- leaving vacant positions empty, laying off a handful of information-technology workers and canceling employees' pagers and cell phones.

But, he said, he needed a way to shave more off the deficit. After considering a long list of alternatives, Stiver opted for centralization. It required that all claims deputies throughout the state move to Indianapolis or lose their jobs. Just 41 of 120 deputies made the move.

Diane Doty of Mishawaka, who worked at the agency more than 30 years, said she had one week to make a decision.

The answer had to be no. Her husband's job and their home are in Mishawaka.

"It wasn't good," she said.

Stiver argues "it was the best of a rough batch of alternatives." He expects the centralization to save his agency $1.7 million annually and bring its debt to zero by the end of the fiscal year.

The second-best option for relieving the deficit would have removed unemployment insurance from the agency's 27 satellite WorkOne offices, meaning jobless people wouldn't have local sites at which to file claims and get questions answered, he said.

Many Democratic legislators do not accept Stiver's reasoning.

"Centralizing the eligibility process set us back by many, many steps," said Sen. Vi Simpson, D-Ellettsville. "We're saving federal dollars on the backs of people who can't get unemployment dollars. It's troublesome, to say the least."

Troublesome now, but only for the short term, Stiver said.

His agency is hiring full-time claims deputies, bringing the final tally to 76. In the meantime, Stiver has rallied the help of current employees who have a background in processing claims to work overtime on the backlog.

"We're going to improve the timeliness of this agency and meet deadlines," Stiver said.

If that happens, it will be a goal that hasn't been reached for years.

The U.S. Department of Labor requires that eligibility claims be processed within 21 days. In fall 2004, department records show, the agency was processing 74.8 percent of claims that quickly. About 14,000 claims sat in a backlog.

More checks were mailed on time, but the appeal process showed a "glaring deficiency," according to a letter sent to former Commissioner Alan Degner in July 2003 by the Labor Department.

In that letter, the Labor Department criticized the state agency's record, saying the timeliness of Indiana's hearing decisions was the lowest in the nation, averaging less than 1 percent within 30 days and 3 percent in 45 days.

The Department of Labor requires 60 percent of hearing decisions within 30 days and 80 percent within 45 days.

Degner could not be reached for comment. But Rep. Phil Hoy, D-Evansville, said that under Degner the agency was running efficiently and providing timely unemployment checks to those most in need.

"I'm all about efficiencies, but this just wasn't a good move now," Hoy said.

The centralization soon could touch employers, he said.

According to federal law, if a state doesn't comply with guidelines for processing unemployment insurance, the government may raise the premiums employers pay.

"That would cause businesses in Indiana to pay more to subsidize Governor Daniels' faulty decision-making," said Dave Patterson, spokesman for the American Federation of State, County and Municipal Employees' Council 62 in Indianapolis.

Stiver continues to emphasize his contention that this issue will be a nonissue by the first of the year.

"We will have the backlog depleted by the end of December," he said.

Former claims deputies question whether Stiver's goal is reasonable.

"We're coming up on the busiest time of the year," said Bonnie Davis of Evansville, who worked 23 years as a claims deputy.

The fourth quarter is traditionally the busiest time for claims as construction companies shut down for the winter and factories start layoffs, she said.

Even getting a response from the agency now seems to be futile, said Joshua Keafer, 26, of Rossville.

Keafer was laid off from his construction job in July. He filed for unemployment but took another job at the end of August, making half what he had made before. He has two children, ages 3 and 5, to support.

"I can't afford to sit and wait for unemployment," he said. "I've depleted my savings. I've pulled 401(k) savings. It's crazy. It's not a good thing for us or the state."



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