UNEMPLOYMENT FIASCO MUST BE ADDRESSED
A month before he was elected governor in 2018, then-Lt. Gov. Gavin Newsom welcomed the premise of a question posed to him by a member of The San Diego Union-Tribune Editorial Board about thenGov. Jerry Brown showing relatively little interest in addressing long-standing problems with state agencies that had been called out again and again in audits and news reports. Newsom expressed specific frustration over the state Department of Motor Vehicles’ difficulties in implementing the federal Real ID law, despite then having 13 years to prepare for the challenge. “It’s a window into why I think most people have had it with government and are sick and tired of spending more money,” he told us. In his 2013 book, “Citizenville: How to Take the Town Square Digital and Reinvent Government,” Newsom wrote that making government more agile, responsive and efficient reduces this frustration.
Of course, running a large state will always invite some criticism, especially in a polarized time like ours and amid extraordinary complications like the COVID-19 pandemic. But it is fair to look at a growing fiasco with the state Employment Development Department, remember that Newsom raised the expectations about the management skills he would show as governor, and then ask, “What happened?”
In 2020, in an attempt to be compassionate after pandemic shutdowns led to massive layoffs, the EDD relaxed its standards for who qualified for unemployment benefits. The result was one of the great ripoffs in California history, as domestic and international criminals — including thousands of people in prison — obtained an estimated $18.7 billion from the EDD. That’s almost exactly the amount that California still must reimburse the federal government for the benefits funding it advanced to the state at the height of the pandemic.
While other states were also victimized, California was hardest-hit. The pandemic unemployment fraud in Texas — the second-most populous state after California and a favorite Newsom political foil — was far less, at an estimated $2.5 billion.
California’s disaster has only been compounded with the evidence that has emerged that even as state funds were being sent to people with prison addresses, up to 1 million Californians with legitimate claims to jobless benefits were denied by the EDD. A Tuesday report by CalMatters detailed the miseries faced by residents who said they were wrongly accused of lying about losing their jobs or misrepresenting their circumstances, then found the appeals process could take years to resolve their cases. CalMatters noted a September 2020 state analysis, commissioned by Newsom, that said the EDD was simultaneously oblivious to large-scale fraud and quick to target individual workers — the great majority of whom were found to be innocent when their cases were manually reviewed.
The EDD declined to respond to CalMatters’ questions about its record, and Newsom’s press office declined to respond to ours. But following the announcement that California’s budget deficit has grown to almost $32 billion, which is about $10 billion more than Newsom projected in January, the state needs to not just be acknowledging existing problems, but addressing them. This is a bad look for any state — but especially one whose leader literally wrote the book on reinventing government.