Under the $44.8 billion spending plan, $7.75 million would go toward modernizing the unemployment system run by the state Department of Labor, which has received more than 2 million initial filings and distributed billions of dollars in jobless benefits and pandemic-relief funds, said Labor spokeswoman Angela Delli-Santi. The current budget allocated $3.875 million.
“We’re investing in modernizing critical operations and technologies in the Motor Vehicle Commission and in our unemployment systems in the Department of Labor — two areas, in particular, where the pandemic exposed shortcomings,” Murphy said during his pre-recorded budget address. “Too many people across New Jersey paid the price for that long standing neglect.”
It’s only a sliver of the $200 million the Labor Department has said it needs to modernize the unemployment system over a five-year period.
For the last 11 months, the state’s unemployment system has come under fire from claimants and elected officials for its clunky website, crashes during certification, and slow programming, leaving some unemployed residents without money for weeks and months.
The Labor Department maintains it was overloaded with claims in the first weeks of the shutdown that led to mass layoffs and furloughs, and that user errors and strict federal guidelines are often at fault.
The unemployment system had gone without major upgrades for 19 years and relied on a 40-year-old mainframe at the height of the pandemic, according to an NJ Advance Media analysis.
Murphy would spend more on on Unemployment Processing Modernization and Improvement, which could be used to expand on current projects focused on upgrading the claims processing system, including a cloud-based service with the United States Digital Service.
“The bulk of the funding would be used to continue to expand cloud services, to help with automated and web self-service functions, analytics, data, communication, and upgrading other online functions. Funding would also be used to enhance user experience,” Delli-Santi told NJ Advance Media.
State Sen. Michael Testa, R-Cumberland, said the governor’s proposed budget “doesn’t get the job done on fixing major problems with New Jersey’s unemployment system,” and noted no funds are currently dedicated to the unemployment insurance fund.
“The governor also didn’t explain what resources he will dedicate to fixing an ancient computer system that has made it impossible for unemployed workers to get the benefits they’re owed in a timely fashion,” he said. “By glossing over this in his speech, it seems likely he’ll propose another band-aid fix rather than the full upgrade that’s needed to support out-of-work New Jerseyans.”
The Labor Department has said that modernization should be funded largely by federal funds. Labor Commissioner Robert Asaro-Angelo wrote a letter to Congress in September urging money be used to upgrade to a cohesive federal unemployment system, rather than 50 separate state-run sites.
A state bill, S2488, that would allocate $50 million of federal funds to improving the state’s unemployment claims processing capacity is up for vote in the Assembly Labor committee Wednesday afternoon. The measure, introduced by state Sen. Troy Singleton, D-Burlington, in May, already been passed by the state Senate.
In 2020, the Labor Department used budget funds dedicated to improving unemployment technology to replacing an agent system for processing claims, upgrading the web claim filing application, and building a web system with the user in mind, leaving it less prone to errors and reducing the need for agent intervention, according to the Labor Department’s documents to the Office of Legislative Services.
The $44.8 billion budget proposal also includes income tax rebates for hundreds of thousands of families, $9.3 billion in direct school aid and the Garden State making its first full contribution to the public pension system in 25 years without raising taxes or adding fees.