Date: 01/20/2010
Final
Department of Labor and Employment Briefing
COMMITTEE ON JOINT BUSINESS AFFAIRS & LABOR
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01:56 PM -- Department of Labor and Employment Briefing
The committee took a brief recess.
01:59 PM
The committee came back to order. Donald Mares, Executive Director of the Department of Labor and Employment, came to the table to brief the committee. The department provided two handouts, a packet of information about the department and a departmental contact list (Attachments B and C). Mr. Mares introduced his senior staff.
02:03 PM
Mr. Mares said there are just over 1,100 full-time employees in the department and the department receives no General Fund dollars. Mr. Mares provided an overview of the department, describing the work of each division, the number of employees, and funding within the department including: the Division of Labor; the Division of Oil and Public Safety; the Division of Workers' Compensation; and the Division of Employment and Training.
02:11 PM
Mr. Mares continued, describing the Workforce Programs and Centers within the Division of Employment and Training. He said there are approximately 70 workforce centers in 9 regions around the state, some of which are county run. He described the Work Ready Certificate offered by the Workforce Program.
02:17 PM
Mr. Mares spoke next about the Unemployment Insurance Program. He reminded committee members that the program is premium based, and is not a hand-out program. He talked about the work that must be done to determine if individuals are eligible for unemployment benefits. He described the levels of appeal for claimants. Mr. Mares talked about the benefits for which people are eligible and about benefit extensions passed by Congress. He said the state fund pays the first 26 weeks of unemployment benefits, and a federal fund pays for extensions beyond 26 weeks. He explained that 60 weeks have been added by Congress.
02:23 PM
Mr. Mares talked about new unemployment claims, saying the difficult situation faced in Colorado is not unique. He explained that unemployment benefit payments increased 500 percent from the 2007 end-of-year amount of $315 million, to the 2009 end-of-year amount of $1.6 billion. He provided a number of statistics on claims including: in January 1999, there were 13,000 new claims; in January 2002, there were 22,000 new claims; in January 2009, there were 28,000 new claims. After May 2009, he explained, the rate of new claims skyrocketed. He reminded the committee that although Congress has extended the time for benefits, the state continues to administer the program.
02:27 PM
Mr. Mares talked about how the department has handled the influx of new claims. He responded to a question from Senator Harvey, saying that in the last week, the division received 7,700 new claims, and for the last few months has received about 6,000 new claims each week. Representative Stephens thanked Mr. Mares and the department for their work in forecasting and staying on top of the issues. Mr. Mares highlighted a number of ways the department has sought to improve service including increasing the number of calls answered in the call center from 3,800 per week to 14,000 calls per week; having a phone line dedicated to taking new claims; getting an internet self-service project up and running that already serves about 35,000 claimants and gives people information they used to have to call to get; and allowing claimants to re-set PINs or change addresses on-line rather than requiring a phone call.
02:32 PM
Mr. Mares responded to a question from Representative Priola about direct deposit for unemployment claims.
Mr. Mares continued, talking about adding personnel, saying not just new call center people were needed, but also new adjudicators. He explained that 100 new call center employees were hired about 8 weeks ago to answer phones.
Senator Foster talked about the help provided to her constituents by the department and thanked the department for their work. Senator Tochtrop, Representative Middleton, and Representative Gagliardi thanked the department as well.
02:41 PM
Mr. Mares explained that federal unemployment law does not allow the outsourcing of unemployment calls and claims.
Mr. Mares continued his presentation, explaining that about $20 million is being paid out each week in benefits. Mr. Mares next spoke about the Unemployment Insurance Trust Fund and need to borrow money to keep the fund solvent. He talked about how the fund is funded - by experience rated premiums on the first $10,000 per employee. He explained that the department assess what the rate will be based on the mid-year fund balance. He explained how premiums would be affected going forward.
02:47 PM
Mr. Mares explained how the premium system works and how the rates are determined. He clarified that loans to the fund this year are interest-free due to the American Recovery and Reinvestment Act (ARRA), but said that may not be the case next year. He said he thinks borrowing will continue through this year and probably next year as well. Mr. Mares responded to a question from Representative Middleton about the types of people who are unemployed and collecting benefits. Representative Liston asked how much the state might need to borrow this year and next and what the interest rate would be. Mr. Mares responded.
02:57 PM
Finally, Mr. Mares talked about what the department does proactively to put people back to work including training and the Jobs Cabinet.
03:03 PM
Mr. Mares responded to final committee questions and comments. Booker Graves, Director of the Colorado Workforce Council, came to the table to respond to a question from Senator Foster about a federal grant related to workforce development. In response to a question from Representative Middleton, Mr. Graves talked about community outreach.
03:09 PM
Representative Rice thanked Mr. Mares and invited the department to continue the dialog with committee members. He commended department staff for their work.