BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1827 (Arambula)
Hearing Date: 7/15/2010 Amended: 6/1/2010
Consultant: Bob Franzoia Policy Vote: L&IR 4-1
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BILL SUMMARY: AB 1827 would require the Employment Development
Department (EDD), commencing by July 1, 2011, to provide
unemployment insurance (UI) benefits assistance in at least one
comprehensive one-stop career center in each workforce area, as
defined. This bill would require that the unemployment benefit
assistance services required to be provided at these one-stop
career centers be funded with existing moneys available to EDD
for the administration of the unemployment compensation program.
The provisions of this bill would sunset on December 31, 2014.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Statewide in-person Major costs to redirect personnel
resources Special*
unemployment insurance through 2014; unknown, likely similar
benefits assistance reduction in on-line/call center
services,
increase in direct assistance services
* Unemployment Administration Fund (7100-0870)
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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.
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.
EDD has identified major costs to provide fully-trained UI staff
in approximately 50 one-stop career centers to assist workers
with their UI claims/questions. EDD has estimated that a
minimum of five staff is necessary in each of the 50 centers,
for a total of
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AB 1827 (Arambula)
potentially 250 staff and 20 managers to supervise those staff.
Annual personnel costs are estimated to be approximately $30
million which would represent an expenditure of nearly eight
percent of the $395 million in federal funds received in 2008.
The administrative costs to assess sites, renegotiate lease
space, remodel areas to accommodate UI trained staff, identify
training and other implementation costs has not been estimated,
though it would be major. The transition of 144 local field
offices that provided in-person services to 14 UI regional
centers that provide services by telephone, mail, fax, and
Internet took nearly three years to complete in the late 1990's.
This did not include advance planning that occurred two years
prior to the transition.
It would likely cost millions of dollars to ensure the one-stop
career center infrastructure could support an additional 270 UI
trained staff and managers, and the increase in persons seeking
in-person UI services. Any money spent on this effort would
result in a decrease in staff that provides services in the 14
UI centers and difficulty in maintaining service levels.
This bill is similar to AB 857 (Galgiani) 2009 which was held on
the committee's Suspense File.