State Scraps $150 Million Computer Program

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SCRANTON -- For a decade the state Department of Labor and Industry, that makes sure people who are out of work get unemployment benefits, attempted to make filing easier by creating a new computer system.

It cost state taxpayers more than $150 million. But a state official said Wednesday that it just doesn't work.

10 years of work and $153 million of taxpayer money were spent on developing the computer system meant to help people collect unemployment benefits, and businesses pay unemployment taxes. But, it's been so problematic state officials said they're scrapping the program altogether.

At a news conference in Harrisburg, Secretary of Labor and Industry Julia Hearthway said it was time to ditch a decade-long project to improve her department's computer system.

Hearthway said Governor Rendell's administration made a deal with computer giant IBM in 2003 to develop a new computer system. It's since cost the state $153 million and Hearthway said, after her department spent more public money on a study, it was determined the system doesn't work.

$153 million is a lot of taxpayer money. But Newswatch 16 spoke with an employee from the Department of Labor and Industry who wanted to remain anonymous and she said the state isn't accounting for hidden costs. For example, how many hours state employees put in to the system trying to make it work.

Officials said the system was supposed to make it easier for state workers, businesses, and for people who collect unemployment benefits.

Newswatch 16 spoke to people heading in and out of Scranton's Career Link offices who said the existing system is very difficult to use.

Jerry Modeste from Avoca just got a new job, but said the money spent on the failed computer system could have been better spent on those who aren't so lucky.

"(The Internet) allows for things to be that much more accessible, you know, and that $150 million could have been used for the people another way," Modeste said.

The state Department of Labor and Industry spent $800,000 on a study to determine that the $150 million was wasted money. Officials didn't say if they have another plan to develop a new computer system.