Wagner, Manderino trade jabs over UC funding dispute at budget hearing

Harrisburg – Sen. Scott Wagner (R-York) and Labor and Industry Secretary Kathy Manderino traded jabs during the department’s Senate budget hearing Tuesday morning, as the spat between Senate Republicans and the Wolf administration over the failure to authorize UC call center service and infrastructure funding continues.

The failure to authorize the funding resulted in December layoffs of nearly 500 employees and the closure of three unemployment compensation call centers around the state, as well as the Harrisburg overflow center.

Wagner posited Tuesday that the closings and layoffs were politically motivated and Senate Republicans made to take the fall for not passing a funding bill that internal memos showed might have still resulted in the closing of between one and three UC call centers.

“It would seem to me this was a political opportunity to lay off a lot of people and sort of throw everybody under the bus over the call center employee number,” he said.

Manderino countered by arguing that while the centers might have closed during the year, the failure to fund the Service and Infrastructure Improvement Fund (SIIF) resulted in the department having to make up savings of $1.1 million per week that was lost to the UC system in order to balance its budget.

“This was not a political opportunity, this was not a political decision – this was a fiscal decision that I hated to make and that I had no choice,” she said. “We laid off people across the board, in every aspect of our department, that served the unemployed people of Pennsylvania.”

Doubling down, Wagner then put forward his contention that comments made by Gov. Tom Wolf when the layoffs were announced regarding the layoffs being the consequences of elections shows that there was some political motivation behind the administration’s decision.

At that, Manderino levied a riposte in interpretation of the governor’s comments that, though thinly veiled and generalized, was largely aimed at Sen. Wagner.

“What I thought they meant was…people who don’t believe in government but run for public office don’t value the services that public employees provide and don’t value the service government provides to its constituencies and that’s what happened to a certain extent,” she said.

“I also told my employees that I was appalled to read in the newspapers that some people were gloating over the fact that they stopped passage of this bill.”

Outside of that, Manderino painted a picture of a UC service system that she said is wounded and broken, with not only call center wait times doubling due to a smaller staff and limited locations, but other areas like tax collection and appeals services being affected due to the interwoven nature of the UC system.

“The customers, the unemployed people of Pennsylvania, are not getting the kind of system they deserve,” she said.

Delving further into the UC funding debate, Senate Labor and Industry Committee Majority Chairman Kim Ward (R-Westmoreland) questioned whether or not the department is expecting to recoup additional past federal funding that an early-February memo from the Wolf administration mentioned the commonwealth might be entitled to.

Manderino replied that upon further review, while the department will apply for the additional funding, they are not expecting to receive the money.

“I would love to have that money, but I don’t think we are going to get that money because the (federal application) process is very proscriptive and we have collected everything the process allows us to collect,” she said.

Meanwhile, others were looking to provide some sort of a short-term fix to the UC system funding to help bring back service levels back to 2016 levels while a long-term fix is investigated.

Of particular note, Sen. Christine Tartaglione (D-Philadelphia), the Minority Chairman of the Senate Labor and Industry Committee, noted her Senate Bill 154 would fund the SIIF at levels sought last session for a one-year extension. Similar legislation – House Bill 34 – has been introduced in the House by Rep. Pete Schweyer (D-Lehigh).

Finally, Manderino confirmed that infrastructure technology improvements that were supposed to be completed by IBM in a now much-maligned canceled contract are likely to be rebooted this summer in earnest with a new vendor, while the department continues to leave all options on the table for how to recoup money from IBM for the failures in the previous agreement.

In response to lawmaker requests, Auditor General Eugene DePasquale is having his office conduct an audit of the UC Trust Fund and SIIF account to determine how funds have been handled, investigate past management practices and how – if at all possible – the layoffs could have been avoided. That audit is expected to be completed in April.

A House hearing on the UC call center funding situation that was previously canceled at the request of the Wolf administration was held on Wednesday, where similar issues were discussed.

Jason Gottesman is the Harrisburg bureau chief for The PLS Reporter, a non-partisan, online news site devoted to covering Pennsylvania government.