The state neglects its technology. It screws over Arizonans who need help.

For decades, Arizona lawmakers have ignored technological infrastructure for social programs. Budget requests released each September show the problems.

Erlynne Campbell started a new job as a bookkeeper in early March 2020 and was promptly laid off once COVID-19 lockdowns started. She had all the documentation she needed to show she lost her job because of COVID-19. But she didn’t get benefits for more than two months because of delays in the state’s unemployment system. 

In the two and a half months she didn’t get payments, Campbell raided her savings and IRA to pay the bills. She called constantly and kept filing her claims. The stress was so overwhelming it led her to seek mental health treatment for the first time in her life.

When she finally began receiving unemployment at the end of May 2020, the Arizona Department of Economic Security kept sending her paper checks, despite faxing and mailing direct deposit information multiple times. 

The needless delay screwed up her finances. She’s still mad about it.

“We were really, truly victimized by this terribly broken unemployment system,” she said.

Erlynne Campbell faces unemployment insurance delays, throwing her finances into disarray. Photo courtesy of Erlynne Campbell

Campbell’s story is typical of those who have sought desperately needed help from Arizona’s social safety net. 

The unemployment debacle mirrors all sorts of headlines across Arizona that showcase just how broken and neglected our state’s technological infrastructure is. Budget requests each year, filed on Sept. 1, give a glimpse of the problem: Agencies lay out their case in stark terms, trying to compel lawmakers and the governor’s office to shell out money. 

Sometimes, the agencies share problems they’re facing, but don’t ask for money or propose solutions. They often nod at the lack of political willingness to spend money to fix problems — even during times, like now, when the state has a surplus.

This neglect is a choice: Starving a welfare program and making it difficult to access leads to lower usage rates, which philosophically aligns with how some lawmakers view social services. Failing to update systems that help people is a choice, one often made through inaction. 

That’s how Arizona ends up with the second-lowest amounts for unemployment payouts and one of the most stringent time limits for Temporary Assistance for Needy Families. And that’s how the near-constant stream of stories of people left behind by ineffective programs continue. 

These system failures aren’t new; politicians have long known that Arizona’s aging social safety net technology is a problem. But the pandemic offered many more people firsthand insight into how programs like unemployment function — or don’t.

The cries of outrage from the masses of newly unemployed held politicians’ feet to the fire and, after decades of neglect, Arizona’s unemployment system could, finally, be replaced next year. Or at least the agency is finally asking, and has millions in federal dollars to match state funds.

If history is any guide, state lawmakers will be reluctant to support such a large technology project. Technology isn’t a sexy topic, and people who use assistance programs aren’t a voting constituency that many lawmakers court. And for some, philosophical beliefs — that assistance programs like unemployment are inherently bad — play a role in diminishing the social safety net: If you make it difficult and cumbersome, fewer people will use it.

Still, Cynthia Zwick, executive director at Wildfire, an advocacy group aimed at ending poverty, said the problem with the unemployment system has reached levels that lawmakers can no longer ignore. But it’s just one of dozens of outdated technologies in programs that have guidelines that also lag the financial reality of many Arizonans. 

“I think it's probably getting to the point where the systems are going to be completely dysfunctional, and it's really going to create some significant issues for agencies to be able to provide the support at all,” she said.

The unemployment system could finally get upgraded — with help from the feds

The state’s unemployment system can’t handle another crisis. It couldn’t really handle this one.

The two systems Arizona uses to administer unemployment insurance are 30 years old, and the coding language they’re built on is 60 years old, the Department of Economic Security told the Governor’s Office this month while asking for millions to upgrade.

“At best, the state’s current UI systems are a series of patchwork fixes developed to keep the system operational with minimal funding,” the agency wrote in its fiscal year 2023 budget request.

This patchwork system caused delays and missed payments for thousands of Arizonans who needed unemployment to survive during unprecedented economic upheaval caused by the COVID-19 pandemic.

When the pandemic hit and the feds expanded unemployment, the department’s ability to make changes was “severely limited by its archaic system,” the department acknowledged in its budget request.

The ability to process unemployment is now stable — there are far fewer people receiving funds now than there were at this time last year. But if another big increase happens, the system will likely fail, DES said. 

Without funding the system upgrades, the department won’t be able to serve its citizens. 

It’s not the only agency that has failed Arizonans: 

• Just this week, an audit found that the Department of Public Safety has not properly maintained a database used for conducting background checks and that court officials rely on for sentencing. The errors and omissions in the database could allow felons access to fingerprint cards or inhibit police from finding suspects, The Associated Press reported. The department told auditors it hadn’t maintained the database because it had other priorities and not enough staff. 

• When the Department of Child Services replaced its antiquated system for paying foster families this year, it turned off the function allowing families to file for monthly payments, leaving more than 6,000 families unable to get access to money they depend on for bills and groceries, the Republic’s Mary Jo Pitzl reported. 

• Even when the state does spend money to update its aged IT infrastructure, the projects are often problem-plagued and bug infested. Since 2019, the Department of Corrections has known that a bug in its new inmate management software was preventing the program from correctly interpreting changes to sentencing laws, possibly leading the department to keep people in prison longer than they should be, KJZZ’s Jimmy Jenkins reported. But the department attempted to bury the problem for rather than spend the money to fix it.

The state has repeatedly chosen not to invest in improvements to its infrastructure, despite warnings and asks from agencies that see the impact of underfunded, outdated technology firsthand.

And sometimes, those agencies don’t even ask for funds to improve, knowing that the state is unlikely to pony up. 

In DES’ fiscal year 2020 request, written in 2018, the agency noted that its UI system hobbled along during the Great Recession, when increased claims led to payment delays and inaccuracies. But, the agency noted, the state’s economy was faring well — a low number of people needed unemployment at that time.

“In recognition that resources are limited, and requests require careful prioritization, the Department is not seeking additional funding for the Unemployment Insurance System replacement; however, it would like to emphasize the need to begin preparing for the next economic downturn before it occurs.”

That did not happen. Though the pandemic and its seismic changes on daily life weren't foreseeable, the problems that an increase in unemployment would cause certainly were. And Arizona’s leaders instead chose to neglect the problem. 

This year’s budget request includes millions in federal COVID-19 relief funds that could save the day, making up the bulk of the money needed to modernize the unemployment system. 

DES plans to use about $40 million in its own budget from the federal relief programs and other funds to help replace the system, but still needs $33 million from the state General Fund to replace the crumbling technology. The agency plans to put out a request for proposals to overhaul the system in October 2021, director Michael Wisehart wrote in a post on the DES website. Wisehart declined an interview this week.

That influx of federal cash could mean the budget request is actually successful this time.

“Probably the only thing that's changed is there's federal money available,” Zwick said.

For people who didn’t get unemployment fast, the system failed

Problems with Arizona’s unemployment system made frequent headlines early in the pandemic, but long after the cameras and headlines have gone away, people who struggled to get unemployment assistance still feel the effects in their daily lives.

Desean Snow, a 28-year-old Phoenician, is still struggling. He had a steady job in automotive financial services, but his employer cut his hours by half in April 2020. He was denied unemployment, first because he was in school, then because he made too much money to qualify.

Desean Snow struggled to get unemployment throughout the pandemic. Photo courtesy of Desean Snow

His work shifted hours so people worked one week, then had a week off, meaning they could get unemployment during their off-weeks. Despite repeatedly filing, DES repeatedly denied his unemployment insurance requests until December, when he received payments for about a month. 

He got a new job in January, but was let go, though the company told the state he had quit, putting his unemployment claim into a pending status. Three months later, DES denied the request. Snow appealed and sought assistance from U.S. Rep. Ruben Gallego’s office, which helped him finally get answers. The same was true for Campbell — she only got answers when she got state Sen. Paul Boyer involved.

Snow only started receiving payments in August and now has a new job, meaning he doesn’t need unemployment anymore.

While he navigated the unemployment process, his life deteriorated. He lost his housing, so documents he needed to receive and send back to DES had no address to go to. At times, he didn’t have a working phone, meaning he couldn’t call in or receive messages about his case.

He sought support and advice from a subreddit about unemployment, r/unemployment.

“It was a nightmare. Honestly, if it wasn't for that subreddit, I would not have been able to navigate it,” he said.

Before the pandemic, he made $18 an hour. It took him until this month to find work that was within that pay range, he said. He’s used GoFundMe to help pay bills. 

As for Campbell, she couldn’t find bookkeeping work that allowed her to work from home during the pandemic and instead changed careers. She started in July as a licensed independent insurance agent.

“I never want to have to file another unemployment claim in my entire life,” she said.

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