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The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

After COVID-19: Rethinking how the state delivers services to Floridians in need

Florida reported its first coronavirus (COVID-19) case in March 2020. The number of cases increased exponentially during the second half of March and have remained at an elevated level ever since. To slow the spread of the virus, the Governor declared a state of emergency. “Stay at home” orders and social distancing mandates were issued for parts of the state, and then statewide. All “non-essential” businesses were ordered closed. Schools were shuttered and students received instruction for the remainder of the 2019-20 school year through distance learning.  

The economic impacts of COVID-19 began to manifest themselves immediately. As businesses closed, tens of thousands of Floridians (including many workers in low-wage, low-skilled positions in Florida’s tourism and hospitality industries) lost their jobs.  Predictably, the hardships caused by the COVID-19 pandemic forced more Florida families to turn to government “safety net” programs such as Reemployment Assistance (a/k/a Unemployment Insurance), SNAP (a/k/a food stamps), Temporary Assistance to Needy Families (TANF), and Medicaid. The state agencies administering these federal safety net programs received a crushing surge of applications for program benefits.

The increased caseloads, coupled with limited and strained state resources, exposed numerous shortcomings in the state’s administration of these federal safety net programs, especially the Reemployment Assistance program which collapsed under the surge of applications. The state’s response, which may best be characterized as “all hands on deck,” was hampered by several factors, including: (1) outdated federal rules governing the administration of the safety net programs; (2) red tape and delays; (3) outdated Reemployment Assistance technology; and (4) burdensome public hiring processes and requirements. Exposing these shortcomings presents opportunities for the state to innovate, modernize, and improve accountability in order to more efficiently deliver safety net programs and services to Floridians in need. 

More flexible staffing provisions will help states respond faster and more effectively. The outdated federal rules requiring the use of merit system personnel to administer federal safety net programs seriously undermine states’ ability to rapidly respond to emergencies such as COVID-19. The immediate response of the state agencies administering the safety net programs was to reassign untrained state agency personnel who are not necessarily skilled for the task and train them as quickly as possible to staff the call centers. Under current law, states cannot use private contractor staff to make eligibility determinations, process claims, conduct recertifications, etc. This makes it extremely difficult for states to “ramp up” their ability to provide safety net program services and benefits to those in need during emergencies like COVID-19. 

Congress recognized this problem when it included provisions in the CARES Act (Section 2106) to provide additional emergency flexibility to hire temporary staff or to take other temporary actions to quickly process unemployment assistance applications and claims. States would not be required to hire private contractors, but they would have the option. States using private contractor staff would still need to meet the merit system requirements contained in law.

It is important that the state shift the focus away from preventing claimants from receiving incorrect benefits to getting assistance to those in need as quickly as possible. This requires finding ways to cut through the red tape and bureaucratic delays that applicants for safety net programs experience to make enrollment easier and faster.

Florida’s CONNECT website has never worked as intended and it is unlikely that it ever will, absent the expenditure of considerable additional state funds. Instead of constantly trying to “fix” the outdated and obsolete CONNECT system, moving the state’s Reemployment Assistance program to the cloud can reduce the costs of maintaining and managing this technology platform. Outsourcing both the Reemployment Assistance technology and business processes, when properly procured, can permit the Reemployment Assistance program to scale up during emergencies like the COVID-19 pandemic without having to purchase expensive equipment or hire new employees, and then scale back down as the demand diminishes. Through proper outsourcing, a private contractor can apply “best-of-breed” technologies as needed to improve business processes and overall customer outcomes.

Rather than hiring additional agency employees, state and local agencies can outsource core business processes, such as eligibility determinations and processing claims, to a private contractor that: (1) has program knowledge and experience managing federal needs-based programs. Many of these companies hire employees from the federal agencies that establish and interpret the requirements for these programs; (2) employs a workforce that complies with the merit system principles and requirements contained in current law; (3) has superior technology; (4) has the staffing flexibility to scale up (or down) comfortably; and (5) better manages and shares the risk. 

Providing more highly-skilled and highly trained workers and best-of-breed technology helps minimize risk to the state and improve customer service. State and local governments use contractors for a variety of purposes (e.g., building roads and schools, etc.), so using contractors to make eligibility determinations and process claims is nothing new. 

Improved contracting can produce better outcomes and greater accountability. The inclusion of “guardrails,“ for example, can help to ensure alignment with an organization’s mission by establishing boundaries that can be used to guide decision making and keep people focused and on the right track. 

Reforming Florida’s procurement system is necessary to ensure that all contracts for large-scale IT projects such as CONNECT: (1) designate an Executive Sponsor who has complete responsibility for the project; (2) includes a well-defined project plan; (3) divides the project scope of work into discrete increments which will permit the final product to be delivered, tested, and accepted incrementally to increase the likelihood of success; and (4) addresses what happens at the end of the agreement. 

Additional measures must be put into place to ensure that, for every large-scale IT project such as CONNECT: (1) key stakeholders are identified and their input and commitment to make the project a success is secured; (2) competent and skilled contract negotiators and project managers are appointed; (3) a multi-year financial model, with funding that spans a number of state budget cycles and covers the entire project life cycle, is developed and maintained; (4) stakeholders and end users are trained and educated on the value of the product and the new operating procedures; and (5) a governance model/structure that assigns accountability at each level of the project and provides a framework to guide decision-making, problem solving, and conflict resolution is in place.

This is where staffing flexibility and procurement reform can benefit Florida taxpayers. Rather than hiring additional merit system employees or reassigning existing staff from other agencies to help prop-up a dysfunctional and inefficient system, the state can contract with expert service providers in the private sector to add capacity, such as eligibility determinations and processing unemployment insurance claims, and increase efficiency through innovation, modernization, and accountability. 

Using contracted expert service providers can provide flexibility, competent workers, and best-of-breed technology that will improve customer service. However, state agencies must be careful to partner with outside vendors that have the resources and scalability to accept the risk and be accountable for quality outcomes, secure client data, and lower costs, and the state must hold vendors accountable for quality outcomes, secure client data, and lower costs. 

Outsourcing public business processes, such as eligibility determinations or unemployment insurance claims, has the potential to permit Florida to implement more efficient and cost-effective business processes, thereby reducing the size of government, saving the taxpayers money, and improving service delivery to needy Floridians.

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