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our guest today is the director of the Department of Employment Security in Illinois he served in the General Assembly for 10 years from west central Illinois our guest today also served as president of the Illinois Business Roundtable an association of corporate business leaders he earned his bachelor's degree in history from Northwestern University our guest today hails from Quincy Illinois ladies and gentlemen Jeff Mays Jeff what a pleasure to be here and see so many friends from so many years of work and endeavor here this is always one of the neatest venues that I that that's out there Jay and Jackie and all it's it's it's the opportunity to get the network going and to get the message out and I really really appreciate Amanda's work and all your staffs working helping put this day together for us and I truly appreciate all of my staff work which you'll be hearing about coming along we've got Jim McDonough my chief of staff and up Lizbeth Leon yos the Lawrence lore is Simon so good folks and and you know they've all I mean they've been a part of the change that I'm going to be describing to you as as we move forward I'm gonna see if this clicker works there we are I think you saw at the beginning there's a turnaround that's happening in all of the agencies right now and it's in keeping with the theme that the governor has created from the get-go about his turnaround agenda now when you're talking about turnaround you've got the titanic battle that's going on right now between the governor and the legislature and so on and those are the kinds of things that that really do make headlines those are the kinds of things when you bring those folks in the room is packed because everybody knows something about it and they've got a feeling they've got a sentiment about it and so on it's in that kind of a theme though that I wanted to share with you some of the other turnaround stuff that's going on here and so can you all hear me just fine okay this is in the context of the overarching thing each executive agency like ours at IDE s or do it or you name it I dot Department of Revenue they've all submitted plans in the very first six months of their leadership with the agencies that focuses on how they're going to be turning their agency around if you will improving the services to the folks now there's a statewide context for turnaround and you can't you know I think you're going to be hearing this as a recurring theme as the election seasons get on but you can see there's employment growth issue here in Illinois and I don't care how you cut it you know some people can frame it nice by picking this month and and doing the two years from there they can make it look better but the bottom line is and this is just off of the most recent data that we've had from July of earlier this summer going back you can see here's the growth rate for the state of Illinois point 5 1% from 15 to 16 and point 3 4 percent from 15 to 17 Chicago metro which is the economic engine of the state ok and it's tough for a downstate er to say that but but but but it truly is but you can see and this metro area goes all the way to Kendall McHenry Lake will and so on you can see I mean they've had more robust growth than us almost twice as much in employment then you get down to Lake and Porter counties of Indiana and you can see while they're smaller than the Chicago metro area the growth rate they've had has been twice as much even as Chicago metro and look at the rest of the state it just makes us cry almost and then you've got rock or Kenosha and rock counties in Wisconsin just to the north of us and you can see the kind of employment growth that they've had we need that growth we want that growth how we get to that growth is I think going to be the big topic for discussion and I know the governor has got his ideas and there's going to be a plenty of others that are going to be coming out but this is the problem and we cannot sustain the state unless we get the kind of growth that we've had at least from the Midwest region which we're lacking in this is the unemployment statewide context for a turnaround you can see the unemployment numbers have dropped significantly in all of those areas that's people like me that are probably getting to the point where they don't want to be in the labor force anymore ok so you got a lot of labor force that declines that are driving the the bulk of the decline in unemployment unemployed people aren't necessarily getting employed that's the point of this slide and the more that we can make those kinds of connections and get guys my age to stick around a little bit longer I think the better it's going to be but in any case the unemployed is another part of the statewide context and this is a pretty busy slide but it basically shows you you know what you saw there is what's past these are projections that we've put together in my agency our agency that basically shows what has been in the blue in terms of the unemployment rate and then our projections going forward for the next four to eight quarters and I actually four years there you can see it's gonna be pretty much the same if we keep it in the same if there's not something that shakes it up a little bit okay we're suggesting there would be about five point three percent for the next four years that's not good I mean we're nine years into a recovery it should be better than that so that's the statewide context what I want to go now to is an agency context they know you know people if they know about our agency they generally know you know we are the unemployment agency we manage and administer for the US Department of Labor the unemployment insurance program make sure that people are getting the right amount getting it in a timely manner that people aren't playing and gaming the systems so we administer the unemployment trust fund that's everybody if they know about our agency would say that's that's what we do but we also provide employment services to both the employer and the claimants the job seekers we also provide labor market information like you saw in the previous three slides which give you the context for what the economic health is of our state and then something that people just don't connect you we are we we administer the unemployment insurance tax system which fuels the benefits that we push out the door further agency context and this is just going to focus on the unemployment and the tax when we were putting together our agenda for turnaround it's about improving touches okay on the claimant side we have basically six million touches with unemployed people every year and we do it through the original claims filing we do it through their certifications their recertifications or adjudications you name it there's at least six million touches on the claimant side alone involving unemployment insurance what we're gonna be talking about today is the two million touches that every employer that we have with every employer in this state there's three hundred eighty five thousand employers that are registered with our tax system people don't know it but seventy thousand of those three hundred eighty five thousand file with us monthly everybody else files quarterly so there's 1.2 million touches with that alone with the quarterly filings and then you've got the other eight hundred forty thousand with the monthly touches those those are very real and frustrating touches or they have been for the employer community for a long long time so we want to improve our touches that's what we're calling our turnaround this is another agency context that people just don't quite connect I show you the graph of the unemployment and how it's down right now well your unemployment insurance taxes in Illinois have actually gone down and people don't understand that but you can see pretty starkly from 2012 which was before me nine point four five percent and they've gone down to seven point three five percent this past year and they'll go down again I assume in November when we put those new rates out so so that's another thing people don't understand that the tax rates in Illinois are not that uncompetitive as when it comes to the unemployment insurance taxes and they're going the right way one other context and this is this is huge because I don't want anything I say to be a reflection like I'm trying to slam the past this agency which which I have come to love has gone through a lot of changes and and the people that are there have been buffeted by these changes and in the previous administration the change that they had to deal with was not good but they dealt with it as well as they possibly could you had a budget declining from the federal government as unemployment insurance claim it's fall the amount of money we get from the federal government to manage the system goes down too they actually sustained a 30 40 million dollar almost 50 million dollar reduction in basic administrative funding in a very very short period of time they had to bring the agency to meet the resource ok this is a key thing you got to do it and it's not fun they went from eighteen hundred and eight people in two thousand twelve to eleven hundred ninety three we're about eleven hundred and five right now they closed two thirds of the local field offices that they had can you imagine whether it's a Republican town or a Democrat town those folks felt it you know at the same time they invested in technology they went from what ten percent claims filed online to about 70 to 80 percent claims filed online as they were closing they had to do this they also had to manage the trust fund when it was going deeply deeply in the red and Illinois chose to issue bonds the employer community led the discussion we're gonna issue bonds we will raise our minimum tax rate a little bit to pay those bonds off and by the way you can see they issued about 1.8 billion in bonds when we came in there was about a billion still outstanding and we paid off the last bond in June so we're solid again ok but we're not a stranger the agency is not a stranger to change this change was something they had to do they did it as well as they possibly could the change I'm going to be describing to you about improving the touches that we've got is basically moving our resource to our mission so we want to you know everything you see these five pieces that you see here are all designed to improve our touches whether it's on the claimant side or on the taxpayer side the employer side we start with my tax Illinois I'm gonna go really deep into that a little bit so I'm not going to linger on that here we went into an Internet Enterprise resource program our systems Monica you can vouch for this we got a 1975 payroll system we're still filling out forms by hand and submitting them and people got a account form and interim and all that other stuff we've got the procurement system that's crazy we had an inventory system that was archaic we had accounts receivables account payables all of it you know when they were reducing the head counts because they had to in the previous administration a lot of those back office things got slammed the process couldn't be fixed because they didn't have the resource they were just trying to stay up with what they got so but we we decided we were going to raise our hand and we were one of the first four pilot agencies in the state to sign on to the enterprise resource program that the government is putting forth the goal was put in a new system retire all of these old legacy systems that you can't hardly even program anymore okay we doubled down on the previous administrations investment in fraud and we are actually we put 11 and a half million dollars from our administrative accounts to retire to old legacy systems Bartz and ORS ones a in any case we came out with oats another acronym install the new system retires two old ones with this eleven and a half million dollar investment we've already been able to establish 42 million in taxpayer offset program non fraud debt so the federal treasury when they get a refund request from somebody that owes us money are going to send us that check first so eleven and a half million spend forty two and a half million basically was established right out of the box last December as the first piece this program to come in just last week the second big piece came in we started actually doing the monthly reporting on wages and we're cross matching that against unemployment that is drawn and anybody that knows the system is you cannot be drawing a wage and getting an unemployment insurance check at the same time just can't do it well with this one with the first week under our belt which we launched August 29th on that we've already established 225 liability liable accounts we're gonna be we're anticipating that this will save the trust fund a hundred and sixty two million dollars over the course of a year when we're fully up and running when we're fully staffed and when the employer community is is sending us back those forms that verify the liability that our programs have established we can't auto adjudicate these things we have to establish that liability so we're really going to be after this tax thing I'm going to talk about it's done we're going to be really reaching out to the employer community on how to help us combat fraud because we're identifying it we need their help before we can collect it we've doubled down on the reemployment initiative and that we started that last July one with a simple thing we simply required people that are drawing unemployment insurance to register for work now that everybody was really torn up about that and twist it up and worried about how that's gonna be accepted out in the community well you know everybody's doing it every we're required by federal law to do it and it was it really went off without a hitch that does not mean it wasn't a huge lift for our technology folks in our agency and our service delivery folks smooth as can be big big lift and that's that's probably saved just that registration alone at least ten to twelve million dollars for the trust fund every year and then UI service improvement within the next month depending on when I get to do its certification we're going to be able to recertify on your mobile phone if you're a claimant you gonna be able to work through a claims application form that was created back in the early 2000s that has been completely revised and should be a heck of a lot easier for claimants to fill out those are the five things they touch the claimants big we've also got a major initiative with our call centers bottom line that those five things touch every employee in our agency and it's changed everybody's jobs and they also are designed to improve those 8 million touches now I'm going deep on the tax piece because this is the one that's keeping a lot of people up at night right now a lot of people you know if you knew that we collected the tax you probably didn't know that that is the largest single employer tax paid in Illinois its 2.3 billion dollars it's more than the corporate income tax we got 329 letters that we've devised over all these years to tell people you owe us this and why didn't you pay but the bottom line is it's a big deal and it's the largest single tax and employers pay four out of five of our tax applications are 25 to 30 years old and even the browser which gives us a happy face is 1998 it's strongly difficult to navigate for employers and a lot of folks have just dropped off over the years they're costly to maintain you know they we had to go to monthly reporting as an agency before this administration the last one had to do that they had to do it on an archaic system or a group of systems that they even didn't were able to do it at all is amazing but the bottom line is we needed to change it and it was one of those top priorities that that we teed up with the governor almost right away this is an example I use I mean I started this road trip back in April because this tax system we're going to be chained okay so the redbud chamber I said you know here's an example we are still sending out 100,000 quarterly tax packets to employers every quarter then we get a hundred thousand back if we're lucky an
a lot of those will have checks if we're lucky and then we got to deal with all that with a man with a staff in revenue that went from 280 people in 2012 to 151 people today not happening it could not possibly happen so we had to come up with a better way and we felt moving to a you know tax collection is a big deal for us but it doesn't have to be there's another agency called the Illinois Department of Revenue that does a lot of tax collection they actually collect 200 taxes their system was basically improved and updated back in 2008-9 and so we and they also had an unemployment insurance module that they opted not to turn on back then because it was gonna cost them money so what we did we went do ours got their system fast enterprise gen tax right now it's got a lot of good buy-in from the employer community on all those other taxes it's been in place for 10 years so it's stable it was a great base to build from so we decided in April of 2015 to propose this to the governor it was gonna cost another eleven and a half million dollars but leadership felt that it was something that needed to be done to improve those taxes or the tax touches we couldn't do it without doing something like this so these are this partnership and I'm telling you it's a partnership I've got a hundred and fifty one folks in my revenue department they've got a whole bunch of other folks in there and all of us have been pulling together to make this whole thing happen in the period of 14 months we're gonna have one stop shop for every employer for registration we're going to have additional modernization opportunities or other agencies because we upgraded revenues based system when we did ours there are other agencies that can come on which is pretty exciting and I don't know that I I'm at liberty to even mention who those other agencies are but there will be others that can come on now that we've done this we can increase the compliance and fraud efforts I mean I know I've got a great fraud program as far as it goes but I don't do IP addresses I don't do bank accounts like I should they do so we're gonna be able to benefit from their their their place will they'll be able to invent to benefit from our programs we will be improving the collections processes I mean already we've reconciled we had three hundred and eighty-five thousand employer accounts in our agency for taxes Department of Revenue had three hundred and thirty five thousand big difference between the two why well we've been going through a huge reconciliation process but in the meantime yeah as a result of that their records are great our records are great they're they're up to date and we'll be able to if somebody's paying US taxes but not county our the Department of Revenue you know they're gonna be able to flag that and vice versa and it's gonna continue to drive cost efficient I cannot tell you you know we've got audits we got collections we've got all the things to establish the debt all of those things are going to be addressed in this new system so what we've been doing is reaching out to employers I at the huddle this morning I was talking to algae cribbens and he's one of the key players behind all of this transition from the revenue standpoint in our department he told me that every service bureau has been touched at least ten times in the last month about this upcoming change we sent them pin numbers we've telling them what all this stuff so we've been doing a very aggressive outreach on the internet on the intranet it's not just been our agency it's been do it it's been Department of Revenue it's been the whole whole group because 385,000 employers are going to have a completely new new experience effective Monday so we've already ended the printing and mailing of the quarterly packets we discontinued the current quarterly zero wage tella filing system which cost us money we eliminated the credit card payment option I mean we had 5000 of our 385,000 accounts to pay by credit card it costs us more than we were collecting so we just stopped I mean that is stopped as of last week and we will be decommissioning while we decommissioned tax net two days ago so we can transition it over we just we decommissioned wizz BFS is going offline tonight at 537 Falcon is going or went offline last way I mean all of these old systems have been wrapped into this new one for one stop it's happening and September 11 new employers you're gonna have one place to register they'll be able to see all their tax correspondents and let me talk about that a little bit 369 letters you know we got it down to 70 templates and they've all been run through the plain language mill so you're not I'm hopeful that when you get correspondence from this agency it's gonna be much more understandable and you'll know what the heck to do with it when you get it okay you'll be able to get confirmation on reports of payments and things like that waivers you know these are other things that you'll be able to do as an employer you just couldn't do on the old system you can request free funds online submit tax appeals electronically set up deferred payments planned power of attorneys report zero wages all of you your rates what makes up those rates so that's that's basically of the five things the enterprise resource program the back-office that that was done we went live with that in October of last year still working out the bugs but but that one's check this one is the next check mark because it's happening on Monday so the governor said about a month and a half ago ok so you've really made a lot of progress IDs great job what's what's next I mean you still got a year and a half to do stuff and so we put together these three next lifts for our agency because basically all five of those through awesome work by a lot of folks are they're gonna be done hopefully by February of this year of next year so these are the next three that we're teeing up and we want to have them done by December of 2018 we're going to we're going even deeper on the reemployment initiative I mean I got ups telling me they need 2,000 jobs in Rockford I've got I've got employers all over the states in we're dying on the vine here help us out we've got to do better there and we're going deeper over the course of the next year and we've got several specific things with that we're gonna be rolling out the very last piece of the technology packages that we really need to work on is to move the benefit charging system to modernize that and put it into the benefit information system and when we do that we will have a fully integrated tax system and benefit system and one of the most modern in the country so that's all going to happen over the course of the next three or four quarters and then these workforce outcomes pieces I mean it's not just getting people to go to work it's getting them with the right skills and how are we doing as a state in preparing our kids for the jobs today and ten years from now with the work you know what we've done I get these wage records every quarter six million of them and we've got them going back to at least 1999 we've been able to link those up in a partnership with Isacc Board of Higher Education the Community College Board and now the State Board of Education we've been able to link those two completers in each of those systems so you want to know how Western Illinois history major compares to a northwestern Illinois history major in terms of the weight and starting wage the wage growth four years out the employment job does its job to get initially image on me money great to over four or five years we've got that kind of data and it's going to shake it up it's gonna shake it up big-time community colleges are going to be able to say these are the programs that we do very well as evidenced by and it's not going to be all these inputs it's going to be how they're completers are doing in the workforce they're more important of parents and the kids are gonna be able to do that same thing that's what this little work force outcomes the thing is and we're going to be sharing you with the governor we've already done the board of higher education we've done the Community College Board as pilots we're going to be sharing with the governor next month the broader so there's all good stuff and the point is and this more information about the point of all this change that I'm talking to you about in my agency and our age in the States Agency for employment security that's a proxy for all the stuff that's been going on that's great in all of those other agencies because they each had to submit plans and I don't know that they were all that much different from mine in terms of the stretch those agencies were required to make so it's happening it's not a room filler it's not a headline together but you know what I want you to take heart this is what at least for this old guys probably last job this has just been one of the most rewarding times in my life didn't work with people at all levels of the agency and seeing them catch fire saying them say I wish we could have done this sooner you know when I walked through a couple weeks ago about nine o'clock one night and our office is right down here in the old Carson Pirie Scott you had a quarter of the Revenue staff still there these are Union and non-union these are folks that threw collections do audits do file maintenance and they're there just trying to make sure this goes off as smooth as that registration did last year with the with the job see these folks have been killing themselves at the huddle this morning that we went to which is the fight final huddle before the final system is closed down tonight one of the folks has been in that room the middle tier not a not a leader so to speak but what a job he's done and he's led in his own way he said I don't think you understand the culture changed that this project has brought down us you know we used to if you wanted to get somebody to do something different type it up and send it over and we'll get back here three weeks four weeks whatever he said we are working together as a team like we have never worked before and this is you know this has been the best most needed thing we ever needed to do now that is for revenue I get the same out of service delivery with all of the things we're trying to do to serve the claimants out there local offices and rely I get the same from our back office folks although we still have some major issues with that everybody the change that that we were able to do the previous administration couldn't they didn't have the resources they had to make the agency fit the resource but we've had the luxury and we've had that we've had the ability with the people that have signed on and that have gotten reenergized we've been able to do some of this we've done Department of financial professional regulations done I was told they had zero licenses online when they started now they got 80% that's huge I mean what 1.2 million license holders Wow anyway so I guess I should ask if there's any questions and I hope you don't have any hard balls because I'm just a director so at church they tell you when you really missed a good sermon you really miss something I have to say that while we've got a more intimate crowd today I think that those of us who work in the financial district everybody should have been here today I really just feel like that I think we should have and this was really good information I'm gonna need a cheater to go back and read everything because that was so many numbers but because we learned really really good stuff at Western Illinois I don't know about you guys Northwestern but you know I don't know I don't know senator Dillard and I are proud Leathernecks and Rob - that's right I don't know about you and Karen you know northwestern folks at some school Northwestern I again thank you so much mr. Mays we do have a few questions do we have any others before we get started cuz they're only a few do did you write it down okay so why don't you write yours and then I'm gonna get started on these me if someone if someone at Reese will take it from you okay so I'm gonna get started um you talked a little bit about the this has no name on it so normally I don't ask these but I will because it's a smaller crowd today you talked a little bit about the average case backlog I think you pretty much covered this person's question someone said they've been waiting for over two years for a conference I think with the technology and things that you guys have put into place I think you probably already talked about that but if you want to say something but you can't you know again the challenge for the previous administration was resource I mean we're our data is we got all the major populations that have been validated then that was never even me that was so bad back I mean when did you have the ability the money the people could even do those kinds of things so we're getting there I think we're getting a you know I don't know if it's a tax case or a jude occasion case but if that person wouldn't mind coming up to me after the visit now I'd be glad to sit down with them and see where there's there's their situation okay well if you want to see I'm one of the see you come staff we can probably get you and touch this moniker somebody from the office okay um Judy Thornburg are you here hi Judy she's asked the question um can you talk about any programs that you're working on for the elderly in employment we actually [Music] or the next question is from Cindy Tomy from the Illinois Manufacturers Association are you here Cindy okay what industries are struggling to get quality applications and what initiatives are underway at the idea is to assess companies facing this particular issue you know in every region of the state you've got different employment clusters Jack you're familiar with this having been a DC EO for a period of time you have different clusters that are huge it might be a logistics cluster out in Rockford down indicators may be a manufacturing cluster of Peoria Rock Island I tell you you know we do job fairs and employment events all over the state with legislators through our local offices whenever a employer has a specific need it comes us and once the see what kind of things we can do for them we will hold those fairs for them in our offices or in that community with your group of employers who try to get the connections maybe I get the Bears last week for the last two weeks in Ottawa Rock Island there's one I missed on the Southside supposedly awesome I think 7,000 jobs were available to be handed the folks that were qualified so those are the kinds of things I mean requesters that I always hear about transportations logistics health IT and those are the big ones and we can always find you know there's plenty of jobs for those skills Sandra gates okay she's here I'm over there in the corner from the Quinn Center is asking how secure your job matching systems and what are your office is doing to stay ahead of any hackers that's a good question I don't know how many of you are aware but last March I got a call that no director once again they said of somebody at hacked into our job leadership and the initial caller says they are estimating 459 records were breached familiy 80 70 got 459 I hate it but I'll send a personal letters as it turned out we have a million two records that were created after the dust is settled now Illinois job link is a vendor for the state of Illinois our bridge at the Department of Information Technology Kurt's run/walk awesome they're in charge of cybersecurity clinical statement that was never around before this this agency and do it brought it all together we have a full response it was very unfortunate that that happened but to my knowledge I think that's the only system that has been breached and it was a vendor system so we hope with the new security measures that we've got but that's how vulnerable is stated I mean that's how vulnerable and I can tell you I feel we're much much more secure having had the experience and then having really upgraded the kinds of response that you deserve as a state so they're as secure as you can get I think never secured enough when it first happened
Marcia Kate cats okay governor state what are the you're retired from governor state is that correct okay on the job training training what are you doing for someone who would like to sign up for that is there a program you can direct her tours Illinois has gone through a full reorganization of all of its agencies involved in reemployment our agency is focused on the initial how do I get and when people apply to us we require them to register on the job exchange and we also then do assess and do assessments with them we call them into our offices if needed and we try to link them up if training is needed if they wanted to start a new career in the different clusters we try to line them up to be with the college community college board or the Department of Commerce opportunity they manage the actual training programs for the state this is a very similar question sorry this is a very similar question from Andy grab on my hair Andy here okay from lumen limit limit II very similar but the final question with WI being implemented and a budget finally passed how can ill annoy ensure that employers participate in designing training and education programs to meet our growing needs and our ever more quickly changing workforce you know I believe there's more amazing he always system because all of the agencies all the four core agencies DHS and the Human Services powers Department Commerce and Economic Opportunity Community College all of them are finding I believe there's a lot more concerted and outreach to the employer community than there's ever been and I think it's going to be much much more effective as we go we've got paranoiacs Andrey's right here with the Cooke partnership I mean I think that's where the rubber meets the road those kinds of things so we've got those kinds of partnerships all over the state about twenty six seven and they know the communities they know what the needs are and I think that if our agency can assist their agencies sure that can and they happen to be our partners nice and biased but I think Karen's a great partner so I think we probably could sit down and have a roundtable with mr. Mays for the next hour but I'm assuming everybody probably needs to get back to work or at least we're supposed to right we're not done yet
