BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 391 (Pan) Hearing Date: 7/11/2011 Amended: 5/27/2011 Consultant: Bob Franzoia Policy Vote: L&IR 5-0 _________________________________________________________________ ____ BILL SUMMARY: AB 391 would require the Employment Development Department (department), commencing by July 1, 2012, to provide unemployment insurance (UI) benefits assistance in comprehensive one-stop career centers in five workforce investment areas. This bill would require that the unemployment benefit assistance services required to be provided at these comprehensive one-stop career centers be funded with existing money available to the department for the administration of the UI program. The provisions of this bill would sunset on December 31, 2015. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Limited in-person Up to $2,800 annually to redirectSpecial* unemployment insurance personnel resources with costs of up to benefits assistance $200 one time per center for operations through 2015, resulting in an increase in direct assistance services. Unknown, likely similar reduction in on-line/call center services * Unemployment Administration Fund (7100-0870) _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Funding to administer the unemployment insurance (UI) program has been declining for several years. As a result, EDD has been moving from providing UI services in person to providing electronic services. By investing in additional staff and not offices and related overhead, EDD has increased staff available to provide services overall, though in-person services have declined. AB 391 (Pan) Page 1 The call center and adjudication center environment provides flexibility in terms of shifting workload between centers. Work can be processed in any center as needed, as opposed to traditional in-person services, when one center might be overloaded with customers while another center might have few customers. Whether EDD should provide more direct, in-person, access to EDD staff able to make UI determinations is a subject of much debate. Currently UI services are provided via phone, mail, fax, and Internet by staff in regionalized centers throughout the state. Staff in one-stop career centers are available to help individuals with some UI services, and for more complex issues, there is a process to refer the issue to trained UI staff for resolution. This analysis estimates that a minimum of five staff are necessary in each of the five comprehensive One-Stop Career Centers, for a total of 25 Employment Program Representative (EPR) staff. Furthermore, an estimated three Employment Program Managers would be needed to supervise the EPR staff. The estimated annual staffing cost for staff and management is approximately $2.8 million. In addition, there would be an estimated one-time cost of approximately $150,000 to $200,000 per center for equipment and operating expenses, such as personal computers and furniture. This bill does not provide an appropriation or reimbursement for these costs, which would have to be absorbed by the existing UI administrative grant. Any money spent on this effort would result in a decrease in staffing, or at best, potentially a shift in staffing depending on job classifications, that provides services in the 14 UI centers and difficulty in maintaining service levels. AB 857 (Galgiani) 2009 and AB 1827 (Aramula) 2010 which proposed providing in-person UI benefits assistance in at least one comprehensive one-stop career center in each workforce area were held on the committee's Suspense File. AB 391 (Pan) Page 2