Claims need to be processed faster

PHOENIX — Saying people who have been laid off are in danger of being forced to live on the street, a public interest law firm asked a federal judge Friday to force the state to process claims for unemployment benefits faster.

The legal papers filed by the William E. Morris Center for Justice claim the Department of Economic Security is not complying with the requirements in federal law about how quickly the must determine if someone is eligible and, if so, start payments. The result, according to attorney Ellen Katz is that people are at risk of losing their homes and going hungry.

That claim, she said, is not academic.

Katz said that Kenneth Kottwitz II applied for unemployment benefits shortly after Christmas after being laid off from his job as a wood worker. To date, Katz said, DES has not made a written decision on his application nor paid him any benefits.

Unable to pay his rent, Katz said Kottwitz moved out of his apartment and lived on the street for awhile before winding up in a Phoenix homeless shelter. She said he lost all of his belongings except what he could fit into two suitcases.

She also cited the case of San Luis resident Ruben Perez who applied for benefits about the same time and, like Kottwitz, has yet to get a determination 2 1/2 months later. Katz said his savings are evaporating and he may no longer be able to support his wife and three children.

Katz said she filed suit because most people in this situation are powerless to do anything about it.

“You’re in what I call this administrative black hole,’’ she said. Katz said many of those whose claims are languishing have never had to file for benefits before.

“They’re not going to be sophisticated in the system,’’ she said. “They keep going into the (DES) office or calling, and just told, ‘Well, we’re working on it.’ ‘’

Katz said the state’s budget crunch is no excuse for the delay. She pointed out that the administrative costs of processing unemployment claims are paid by the federal government, meaning those duties are unaffected by the cuts just made by lawmakers in the amount of state funds going to DES.

Aside from seeking a court order to force faster processing, Katz also wants the court to require DES Director Linda Blessing to develop and implement policies, including additional training of workers, to bring the state into compliance with federal law and constitutional requirements.

Liz Barker, spokeswoman for DES, said her agency had no comment on the lawsuit.

Katz, in her legal papers, said federal law requires DES to pay 87 percent of first-time claims within 14 days following the week of the claim. She said, though, DES was timely only 74.2 percent of the time in August, with figures in the 60 to 75 percent range through the rest of the year and 63.1 percent in January.

Separately, she said, federal law requires 80 percent of determinations of eligibility in cases where there is some question to be resolved within 21 days. Katz said that figure got no higher than 45 percent since August — and dropped to less than 9 percent in January.

The lawsuit comes as the number of people seeking first-time claims in Arizona hit a record 39,076 in January. And for the last week in February alone, 6,390 people who were fired or laid off sought benefits.

Barker said about 70 percent of new claims have “issues that must be resolved by a staff member.’’

She said DES has more than doubled its staff since last May and is the process of hiring an about 50 more. But Barker said it can take several months for new employees to obtain the experience necessary to deal with those 70 percent of claims that have issues.

Barker also said most staffers work nights or weekends to process claims. And she said employees in other DES programs who have appropriate prior experience also have been called on to work overtime to help process claims.

The number of Arizonans actually getting payments as of the last week of February hit 89,125. That compares with 71,026 in January and 34,827 a year earlier.

Indications are the situation will get worse.

The state’s jobless rate hit 7.0 percent in January, compared to 4.4 percent in January 2008. Dennis Doby, senior director of research administration at the Department of Commerce, said he expects that to hit at least 8 percent.

This isn’t the first time Katz’ public interest law firm has sued DES.

A 2004 lawsuit charged that the agency was not complying with federal laws which require states to approve or reject all applications within 30 days. That same law mandates that requests by the most needy be handled within seven days.

Katz said that lawsuit forced DES to do a better job.