04/12/04 — Employment agency faces loss of money

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Employment agency faces loss of money

By Sam Atkins
Published in News on April 12, 2004 1:58 PM

The Employment Security Commission's offices in Goldsboro and Mount Olive are expecting a funding shortfall beginning July 1, possibly causing some employees to lose their jobs.

"We are under a lot of financial stress," said Bill Pate, manager of the Goldsboro office.

Officials have estimated that the ESC could cut 188 full-time workers statewide, most coming from the 96 service offices across the state. The offices help people find jobs and training and also handle applications for unemployment benefits.

Pate said the worst case scenario is four people being laid off between the two county offices.

The ESC is not receiving money from the state because there is no interest available in the unemployment insurance trust and reserve fund. The state established the $200 million reserve fund in the mid-1980s, and the commission decided in April 2003 to divert the entire fund to pay off unemployment benefits.

About $1.3 billion in unemployment benefits was given out in the state in 2003, and around $12 million was given out last year in Wayne County alone, said Pate.

For the first time in the ESC's history, it has borrowed money from the federal government to pay out unemployment benefit checks. It stopped receiving money from the federal government earlier this month. The offices are now using money from the federal food stamp program and other programs to operate, he said.

This lack of funding will hinder the offices' ability to fund some of its staff positions. Pate said all of the state offices laid off their part-time employees in October. He does not expect any layoffs of permanent staff at the county offices in May or June, and they are working hard to save resources to avoid layoffs when the new fiscal year begins on July 1.

They are saving resources by not hiring new staff and filling vacant positions through transfers and promotions of existing permanent employees, added Pate.

Managers are developing a method to provide the same services with fewer employees. The offices will soon become more automated, and unemployment claims will be filed through the Internet and through call centers in Raleigh using voice recognition.

Pate said there is no specific list of offices that may close or a definite number of how many employees will be laid off. There are a total of 12 employees combined in the two Wayne County offices.

The state Legislature goes back into session May 20, and additional funding for the ESC could depend on how much revenue the state receives from income taxes. Pate said he will know more specifics in May.

Until then, his staff will continue to prepare for the future.

"With the active involvement of our local managers and regional managers, we are hopeful that the actions we have taken and are continuing to take will be effective in allowing us to continue to serve our customers without the layoff of permanent staff," added Pate.