A new state computer program used between October 2013 and October 2015 determined that tens of thousands of unemployed Michiganders were attempting to defraud the state with bogus unemployment insurance claims. The penalties that were assessed created a huge surplus in the unemployment insurance fund so Republicans yesterday tapped that money to fill the budget hole created by years of tax giveaways to corporations in our state. The problem is that most of those determinations were themselves bogus. And when I say “most”, I do mean “MOST”. 93.5%, in fact:
A bill headed to Gov. Rick Snyder’s desk transfers $10 million in “surplus” unemployment insurance funds to help balance the state budget at the same time thousands of Michigan residents are claiming millions of dollars in benefits and penalties were unlawfully taken from them after the state wrongly accused them of unemployment insurance fraud.
During their lame duck session, lawmakers gave final passage Tuesday to Senate Bill 1008, shifting $10 million to the state’s general fund from the unemployment insurance contingent fund. […]
The Michigan Unemployment Insurance Agency, partly at the request of the federal government and partly on its own, reviewed 22,427 cases in which a computer determined a claimant had committed civil fraud between October 2013 and October 2015 and found that 20,965 of those cases did not involve fraud, Unemployment Insurance Agency spokesman Dave Murray said Wednesday. That’s an error rate of more than 93%.
The balance in the UI contingent fund’s penalties and interest account — largely built on money seized from claimants accused of fraud — swelled from $3.1 million in 2011 to about $155 million this October, according to a report from the House Fiscal Agency.
Royal Oak attorney Jennifer Lord has a class action suit pending that would compensate those who were inaccurately determined to be defrauding the state. It is her contention that the fund should be held in an untouchable trust until these people are made whole. “Given these facts, it is critical that this fund be held in the strictest trust until each and every claimant whose tax refunds were seized and whose wages were wrongfully garnished have been made whole,” she told the Detroit Free Press.
The budget crisis in Michigan is largely caused by the sweeping tax cuts passed by Michigan legislators and signed in to law by Gov. Rick Snyder since they swept into power in 2010. Now they are trying to use money illegally obtained from unemployed Michiganders to fill the hole they created.
In other words, just another day under Republican rule in Michigan.
[CC image via James Lee | Flickr]