canada africa partner reservation Fiscal Year 2025 Budget for the Georgia Department of Labor

Fiscal Year 2025 Budget for the Georgia Department of Labor

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Overview: Fiscal Year 2025 Budget for the Georgia Department of Labor

Governor Kemp’s proposed 2024 amended budget year (AFY) included a net increase of nearly $844,000 for the Department of Labor (DOL) and covered $1,000 bonuses for temporary workers. While overall DOL spending will decline 4% between FY 2024 and FY 2025, the FY 2025 spending proposals call for $443,000 in investments in specific areas, such as increases to cover DOL cost-of-living adjustments – Employees . Additionally, there will be significant reallocations of state resources within the DOL to modernize Georgia’s unemployment insurance (UI) system. For fiscal years 2024 and 2025, Governor Kemp is proposing several fiscal adjustments, including migrating UI application files to a digital cloud environment, eliminating backlogs in the UI complaint process, and addressing customer service challenges.

Through the numbers

Proposed revised highlights for fiscal year 2024

  • $844,000 was added to provide $1,000 bonuses to full-time eligible employees
  • $1.95 million transferred from DOL’s Unemployment Insurance Division to migrate DOL files to a digital cloud(1)
  • Georgia Building Authority spending increased by $5.5 million to manage migration of DOL files to a digital cloud

Proposed highlights for fiscal year 2025

  • $35,000 was added to provide a 4% cost-of-living adjustment for all full-time eligible employees
  • $1.95 million was transferred from the DOL’s Division of Unemployment Insurance to address disability claims processing backlogs and customer service challenges
  • $409,000 was transferred to DOL under terminated Georgia Technical College System workstation leases; The amount was allocated to address UI complaint handling backlogs and customer service challenges.
  • $50,000 was transferred from the DOL Division Administration to address (as above) UI complaint hearing backlogs and customer service challenges

DOL’s modernization efforts must prioritize improving access for eligible and legitimate needy workers in Georgia

Modernizing the Georgia Department of Labor’s UI system is an ongoing process of adapting agency systems and programs to meet the unmet needs of workers. Balancing the need to detect improper benefits and the needs of workers submitting claims is essential for resourceful and equitable systems technology. A $3.1 million federal grant allowed Georgia to complete a modernization effort in 2023 to improve plain language on unemployment benefit claims.(2) The State of Georgia has proposed modernization spending plans for the Georgia Department of Labor (GA DOL ). These plans include migrating the state’s unemployment insurance (UI) system to a digital cloud, improving customer service and improving claims processing. However, it is important to ensure that these proposals include protection and equality objectives, prioritizing the needs and rights of workers. Possible goals could be:

  • Leverage new technologies to develop benefits programs that provide identity verification and prevent improper payments to gig workers, incorporating community input into strategic planning
  • Set bold, forward-looking standards for the percentage of claimants who receive unemployment benefits on the same day they file
  • Improve data transparency regarding the classification of fraudulent claims. This will help government officials and lawmakers evaluate processes that are prone to fraud or unclear to applicants

Failure to design Georgia’s unemployment insurance system to meet the needs of workers suffering from structural inequality, including Black, brown, and Georgia’s working-class workers, could result in legitimate claims being wrongly labeled as fraud. Among claimants who receive too many UI payments due to honest mistakes, GA DOL’s liability, in whole or in part, increased from 33.6% in FY 2021 to 39.4% in FY 2023, an increase of nearly 6%.( 3) Meanwhile, over the same period, the share of UI overpayments classified as fraudulent as a percentage of all payments fell from 6.2% in fiscal year 2021 to 3.7% in fiscal year 2023. New technologies need to be developed with these data trends in mind and the applicant should be focused on protecting them. who are more likely to have problems due to the following problems:

  • Sharing an IP address, postal address or bank account with another applicant;
  • Have a name that appears incorrectly in databases OR
  • Failure to compile required documentation due to arbitrary or improper submission by the employer.

Through comprehensive modernization, Georgia can create a new path to employment and economic mobility for Black, brown, and working-class people, free from the shadow of a punitive prison system and society.

Impact on the total budget

A significant portion of Governor Kemp’s modernization-related spending proposals are based on eliminating nearly $4 million from DOL programs critical to administering UI benefits and collecting revenue for the UI Trust Fund. These tax measures threaten to erode trust fund revenues and create challenges for the agency in processing unemployment claims for laid-off workers seeking unemployment benefits. Georgia has one of the lowest average employer contributions in the country, and premiums are often made even inadequate by routine legislative cuts. Low employer contributions in Georgia leave a UI trust fund underfunded and at risk of insolvency in a future recession.

Although the federal government funds a significant portion of the Department of Labor’s administrative functions, state appropriations play a critical role in offsetting fluctuations in federal appropriations. Many states, such as Georgia, rely on additional sources of state revenue beyond federal funding or general state appropriations. (4) State lawmakers should consider the potential impacts of current tax proposals, including increased unmet needs of laid-off workers, stronger reductions in public service deficits and increased public distrust. These are common challenges when balancing maintaining operations and assembling new components within a state’s UI system. Lawmakers should also consider how our unemployment system can leverage available revenue sources to equitably support modernization efforts and increase UI Trust Fund reserves to withstand future economic downturns without further limiting access to unemployment benefits.

Endnotes

(1) This transfer of state resources is proposed between two departments within the GA Department of Labor: Unemployment Insurance and Departmental Administration. The appropriation process allows State funds to be transferred between State agencies or between departments within a State agency to align budgets with expenditures or to reprioritize funding for targeted purposes.

(2) U.S. Department of Labor. (2023, August 31). The U.S. Department of Labor is providing $3 million to promote equal access to unemployment benefits in Georgia. https://www.dol.gov/newsroom/releases/eta/eta20230831-0

(3) GBPI analysis of USDOL payment accuracy reports. https://www.dol.gov/agencies/eta/unemployment-insurance-payment-accuracy/data

(4) In addition to federal and state general appropriations, employers in Georgia shall provide administrative contributions to support the administrative needs of the DOL. The passage of SB 160 during the 2023 legislative session restored this funding on January 1, 2024, after expiring on December 31, 2022 under the previous law.