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Panel votes to put California unemployment bill on fast track

The Assembly measure would make the state eligible for $839 million in federal stimulus money. But a technology deficiency could delay benefits until 2010.

March 05, 2009|Marc Lifsher

SACRAMENTO — A legislative committee Wednesday gave fast-track approval to a bill to funnel $839 million in federal stimulus money into California's insolvent unemployment insurance fund, but the benefits may not help California's 1.9 million jobless before late next year.

The Employment Development Department, which sends out unemployment benefit checks, said it needed 18 months to modernize its 3-decade-old computer system. Without the upgrade, it won't be able to meet an Obama administration mandate to change eligibility criteria so that people who lost low-wage jobs could qualify for benefits.

Unemployment benefits range from $65 to $475 a week.

"The computer system puts a barrier in front of us," Steffanie A. Watkins, assistant secretary of the California Labor and Workforce Development Agency, said at a hearing of the Assembly Insurance Committee.

The bill, AB 23X3 by Assemblyman Joe Coto (D-San Jose), would make changes in state law that would allow some low-wage jobless Californians to qualify for unemployment benefits, a move that would make the state eligible for $839 million in federal stimulus money.

The Obama administration is asking California to join 21 other states currently using an unemployed worker's most recent pay in calculating eligibility for benefits. Under the current formula, the most recent quarter's pay is not counted, disqualifying some people -- often low-wage earners -- whose work is sporadic. The switch would allow about 64,000 more people a year to get unemployment benefits.

Gov. Arnold Schwarzenegger has said he wants the federal funds to help balance California's insolvent unemployment insurance program. However, he has not taken a position on the Coto proposal.

But the labor agency's Watkins suggested to the committee that it strip authorization for the $839 million out of the Coto bill. Instead, she proposed dealing with the expanded eligibility question as part of more complicated negotiations to fix the unemployment insurance fund.

But those talks seem remote, said Assemblyman Mike Feuer (D-Los Angeles), since getting a bill passed would require some Republican lawmakers to vote for an increase in taxes paid by employers.

The Democrat-dominated committee approved the Coto measure on an 8-2 vote and sent it to the Assembly Appropriations Committee.

Business groups, such as the California Chamber of Commerce, and some Republicans oppose the expanded benefits because they could hit employers with higher taxes.

Feuer, other Democrats and advocates for the working poor said they also were skeptical about the Schwarzenegger administration's argument that it can't fix the employment department's computers quickly. "We live in the most high-tech state in the country, and Georgia and Oklahoma have already figured out how to do this," said Maurice Emsellem, of the National Employment Law Project, which advocates for low-wage workers.


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