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Kentucky lawmakers briefed on unemployment system changes, how the state is paying for everything

Posted at 7:11 PM, Jul 08, 2020
and last updated 2020-07-08 19:11:30-04

LEXINGTON, Ky. (LEX 18) — As some Kentuckians still try to get their unemployment problems fixed, state lawmakers were briefed on where unemployment insurance currently stands.

The Interim Joint Committee on Revenue and Appropriations heard from Education and Workforce Development Deputy Secretary Josh Benton and Amy Cubbage, General Counsel for the Labor Cabinet, on Wednesday.

The committee's co-chair, Senator Christian McDaniel, explained that unemployment is the most pressing issue he hears about from the people he represents.

"In my eight years in the General Assembly, I've received more desperate and personal constituent contact on this issue than anything I've ever seen," said McDaniel. "While I'm certain there are many, many people working their fingers to the bone over there and burning the midnight oil - the fact is for many, many Kentuckians the system continues to fail them."

Cubbage said Kentucky is taking action to address the problems. She said unemployment insurance has been moved to the Labor Cabinet, where more staff members are equipped to handle the situation. More in-person services are also being offered to help people with their unemployment issues. The state's old unemployment technology system will be improved, and the number of claims processors has increased from roughly 40 to 100.

In addition to those 100 claims processors, Kentucky has also hired Ernst & Young to provide 300 experienced workers to help resolve outstanding unemployment claims.

"They had recently been helping Colorado and at least one other state in processing unemployment claims and in clearing out backlogs that were created by the pandemic," said Cubbage.

"If we did not have this assistance, we would have to pull existing employees from working claims as they come in, as well as writing adjudications. This would take four to six months to get through the backlog," said Cubbage.

The assistance is being funded with federal money from the CARES Act.

Kentucky has also borrowed money from the federal government to pay for people's unemployment.

Benton explained that just before the coronavirus hit in March of 2020, the fund has almost $584 million. As of June 5th, the fund was down to around $150 million.

The fund currently has a balance of zero, so Kentucky's unemployment cash has run out. However, the need for unemployment hasn't, so Kentucky took out a loan to continue paying people.

"The approval in June was for $865 million, and that covers us through the end of August," said Benton.

"This loan was entirely necessary. Without the loan, unemployment insurance payments to Kentuckians would've stopped," said Cubbage. "So, there was no option here."

The loan only covers Kentucky for three months. If Kentucky still needs help with funding unemployment in September, another loan or federal aid will be necessary.