From CalMatters investigative reporter Lauren Hepler:
Cash vanishing from EDD debit playing cards. Massive-dollar bets on the expertise that powers California’s job security internet. Billions in unemployment debt with no clear path ahead.
No, this isn’t a pandemic flashback.
It’s immediately’s unsettled actuality for the California Employment Growth Division and the employees and companies who nonetheless depend on it. A 12 months after CalMatters investigated the EDD’s unemployment crashlegislators have moved on however key points stay unresolved.
On the subject of fraud, California was let off the hook after the federal authorities agreed to soak up billions in losses from scams concentrating on pandemic applications. However now, employees are reporting newer points with debit card fraud, even after ex-EDD cost contractor Financial institution of America bowed out early this 12 months.
Lea Bitton was navigating a high-risk being pregnant when $4,000 disappeared from her debit card managed by new EDD contractor Cash Community — an ordeal that made her considered one of no less than 74 Californians who’ve filed lawsuits or complaints this 12 months about Cash Community and its authorities debit playing cards to the federal Shopper Monetary Safety Bureau.
Monetary regulators haven’t but analyzed more moderen fraud reviews. The EDD and Cash Community say the fraud is extra restricted in scale, and that claimants ought to report all considerations.
- Matthew Lokerfraud lawyer: “It’s deja vu a little bit. It’s a difficult problem, but it shouldn’t be the consumers who are left holding the bag.”
Whereas employees play whack-a-mole with fraud, a brand new report warns that the state is approaching an even bigger monetary breaking level.
California remains to be greater than $20 billion in debt to the federal authorities after taking over loans to cowl pandemic unemployment advantages, costing taxpayers $1 billion in annual curiosity. Now, because the mud settles and individuals are again at work, the system is on monitor to maintain shedding $2 billion a 12 months because it fails to usher in sufficient income to cowl bills, in response to the report by the California Legislative Analyst’s Workplace.
- Chas AlamoLAO principal fiscal and coverage analyst: “If we had a UI tax financing system that wasn’t broken, these costs wouldn’t exist. This is entirely avoidable.”
To dig out of the monetary gap, the LAO recommends simplifying the state’s Eighties-era tax system and elevating California’s lowest-in-the-nation unemployment tax base — a pitch that would lastly power a reckoning for legislators torn between anti-tax enterprise teams and labor advocates who need to develop the protection internet.
Learn extra on the state of EDD within the story.
