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the economy during economic downturns. We urge you to give favorable consideration to these requests.

Since fiscal year 1984, Congress has appropriated $18-20 million each year for unemployment insurance automation. These dollars have been used to build a basic unemployment insurance automation infrastructure, so critical to the effective and efficient payment of benefit claims and collection of unemployment taxes.

A recent survey of unemployment insurance automation, conducted by the Interstate Conference of Employment Security Agencies, shows that computer-related hardware needs through the first half of this decade would require funding at $31 million annually. Additionally, the survey reveals unemployment insurance software enhancement needs, both long-term and short-term, total $63.5 million.

To better address these unmet needs, we urge you to increase appropriations for unemployment insurance automation grants in fiscal year 1992 to $30 million.


In today's economy, American workers are much like trapeze artists. The unemployment insurance system serves as a safety net to catch them when they fall, and the Employment Service provides a ladder that enables citizens to climb back into the workforce. The current condition of both the net and ladder are of grave concern. The holes in the safety net have been apparent during this recession. Unfortunately, there are also missing rungs in the ladder.

Mr. Chairman, once again the Administration has proposed a draconian cut in funding for the public Employment Service. The President's proposed funding level of $750 million for fiscal year 1992 would be a $55.1 million reduction from the fiscal year 1991 level of $805.1 million. We have attached a third graph to our written statement (Attachment 3) that illustrates the funding levels for the Employment Service since fiscal year 1984, and, more importantly, the buying power of those dollars.

The public Employment Service assesses work force trends and employer needs; provides assessment, counseling, testing, and referral to training for job seekers; and ultimately matches out-of-work Americans with available jobs. In program year 1989, the latest year for which figures are available, 181⁄2 million job seekers were served by the Nation's Employment Service.

The states' ability to provide these vital services for employers and workers has been hampered by more than a decade of diminishing resources. As appropriation levels have remained relatively static, and the buying power of dollars available has continued to erode, the states have experienced dramatic increases in the size of the workforce which the system is designed to serve, as well as major increases in the costs of operation.

The realities of a world economy, global competition, changing technology, and new national priorities have resulted in dislocations in the workforce. What this means is that more workers are being dislocated permanently from their former employment, and new jobs are being created that require different skills. The need for an efficient and effective public Employment Service has never been greater than it is in the 1990's.

On behalf of the states, ICESA urges you to appropriate $838.1 million to support state Employment Service operations. This would provide only for an inflationary increase over last year's appropriation. We believe this is a responsible position under the Budget Enforcement Act provisions.

Further, the states have not been able to tap into the vast array of information technology available to perform more effectively and efficiently many of the jobmatching functions, because dollars to automate the Employment Service system have been grossly insufficient. Again this year, the Administration has failed to res quest any automation dollars. Congress has begun an investment in Employment Service automation, with $12.5 million appropriated for Employment Service automation grants each of the last two fiscal years. We strongly recommend that $25 million be appropriated in fiscal year 1992 to expand the Employment Service's capacity to provide job placement and job counseling assistance to job seekers as well as applicant assessment and applicant screening for employers.

ICESA is also very concerned about the Administration's decision not to fully fund the Disabled Veterans' Outreach Program, despite passage of H.R. 180, now Public Law 102-16, which extends the program for another three years. This program helps to ensure that disabled veterans across America receive priority treatment from the state Employment Service staff. We recommend restoration of full funding for the Disabled Veterans' Outreach Program, a level of $80.4 million, and funding of its companion program for Local Veterans' Employment Representatives at $74.0 million.

A scarcity of funds to support the Employment Service and these specialized veterans employment programs is difficult for employers, workers, and the states to understand, because the Federal Unemployment Tax paid by employers produces revenues dedicated to these services. These funds are held in the Employment Security Administration Account in the Federal Unemployment Trust Fund, which had a balance at the end of fiscal year 1990 of $2.24 billion, over $1.16 billion above its statutory ceiling.


A unique feature of the Employment Security System is the important array of programs-providing labor market information-data, management information, and economic analyses to support federal, state and local policy makers in their evaluation of labor market conditions. This "labor market intelligence network," upon which so many critical employment and training decisions are made, needs to be strengthened.

Funds for gathering key information have been curtailed over the last several years-resulting in reduced occupational details, local current employment data cutbacks, and other related data reduction. Compounding this data disappearance is the lack of technical assistance, training in analytical techniques, and coordination-from the Department of Labor for the maintenance of a comprehensive state/ local labor market information system required under the Job Training Partnership and Carl D. Perkins Vocational and Applied Technology Education Acts. ICESA supports funding levels of $70.8 million for Bureau of Labor Statistics programs, $9.4 million for the National Occupational Information Coordinating Committee, and $4.3 million for the Job Training Partnership Act Title IV-E program.

For fiscal year 1992, we urge you to establish an automation grant similar to the ones supporting the unemployment insurance and Employment Service programs, to provide capabilities for all states to produce local occupational information needed in planning employment and training programs. An initial investment of $6.3 million is needed for states that have little or no automation in their research departments across the nation.

In closing, we believe expansion of automated capabilities is the indispensable component for insuring the continued success of the Employment Security System programs and for making them more responsive and effective in meeting the needs of the people we serve. Although we have seen significant improvements in the state of automation among employment security agencies in recent years, we believe the necessary automation infrastructure requires a greater commitment of resources. As outlined in this statement, such a commitment would include raising the level of appropriations for Employment Service and unemployment insurance automation grants and initiating an appropriation for labor market information automation.








History of Ul Workload (AWIU) vs.
Base Funding Level: FY 1975-92

Millions Average Weekly Insured Unemployed (AWIU)


UIS: April 17. 1991 c:\work\workload

75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 Fiscal Year

Base Request

Actual Total Wkload

Pro Total Workload

FY 1991 and FY 1992 requests assume @ 1.8/1.7 Million Base AWIU

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74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91


UIS: April 17, 1991
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