Florida Gov. Ron DeSantis (R) said he will direct the state inspector general to investigate the state's unemployment insurance system, which has come under scrutiny as workers struggle to obtain benefits during the COVID-19 pandemic.
During a May 4 news briefing, DeSantis said he will order the inspector general to investigate how the state’s unemployment insurance system website, CONNECT, was paid for and how the contracts for the system were amended.
DeSantis said there were issues with the website — which cost the state nearly $78 million — when it launched in 2013 under then-Gov. Rick Scott.
"It's one thing to not have a good system if you go on the cheap or whatever, but to pay that much money and then [have] all the problems that we've had to deal with — it's a big problem," DeSantis said.
The governor's announcement came after Nikki Fried (D), secretary of the Department of Agriculture and Consumer Services, sent a May 4 letter to Chief Inspector General Melinda Miguel asking for an investigation.
In the letter, Fried said state auditors “cited major, systematic problems” with CONNECT in 2015, 2016, and 2019 reports.
The 2019 audit report uncovered several issues with the system that came to light in an earlier audit and were not fixed.
“Governor DeSantis was briefed on these problems upon taking office. Since then, the COVID-19 pandemic has caused unprecedented requests for unemployment assistance but has also exposed a failure to correct the problems,” Fried said. “However, despite these known failures, the governor has not acted with the urgency or transparency that the situation necessitates.”
Florida has the $7,000 federally mandated minimum taxable wage base that was set in 1983 by the Federal Unemployment Tax Act.
Christopher O’Leary, senior economist at the W.E. Upjohn Institute for Employment Research, told Tax Notes May 5 that $7,000 is too low in a taxable wage base.
“They’re trying to keep taxes down, and as a result the range of benefits [is] low,” O’Leary said.
The state has the lowest unemployment insurance tax of any state at $50 per employee on average, which is much lower than the national average of $277 per employee, according to a March report from the U.S. Department of Labor.
In a May 4 blog post, the Institute on Taxation and Economic Policy said “to keep unemployment insurance taxes this low requires preventing unemployed workers from accessing benefits.”
“Years spent making it more difficult for Florida workers to access benefits have left the state ill-equipped to help residents through the toughest job losses since the Great Depression,” the institute added.
DeSantis could not be reached for further comment by press time.