Jobless claims

Initial jobless claims in Kentucky went from 2,463 the first week of March to 113,149 the last week of March, and the federal government increased the types of unemployment available, the combination of which overwhelmed the system.

After hundreds of people seeking help in resolving their unemployment insurance claims descended on the Capitol last week, a legislative panel convened Friday to investigate the backlog.

Calling it “almost criminal” that some Kentuckians have waited since March to have their claims processed, Sen. Jimmy Higdon, R- Lebanon, said the executive branch had “created a crisis within a crisis.” He said the governor’s administration appeared to underestimate the need for unemployment insurance when it ordered many businesses to close in a bid to reduce the spread of COVID-19.

Sen. Danny Carroll, R-Paducah, used the meeting of the Interim Joint Committee on Economic Development & Workforce Investment to press whether Kentucky’s Office of Unemployment Insurance (OUI) officials were consulted before the governor ordered many businesses closed.

Education Workforce & Development Cabinet Deputy Secretary Josh Benton testified that he was not consulted before the order that closed the businesses. OUI currently is housed in Benton’s cabinet although there are plans to move it to the Labor Cabinet.

Carroll, a co-chair of the committee, then questioned the wisdom of moving OUI to the other cabinet amid the COVID-19 pandemic. Labor Cabinet Secretary Larry Roberts testified that the move would put OUI in a cabinet it had traditionally been housed. He said that should bring more expertise to the office during this crisis.

Adam Bowling, R- Middlesboro, lamented that the state was able to marshal all its resources to provide COVID-19 testing in every county but couldn’t use those resources to process the surge of UI claims. He added there have been about 14,000 confirmed COVID-19 cases compared to the hundreds of thousands who are unemployed.

“It doesn’t seem ... that the state has done anything to reach out and better this situation,” Bowling said. “I realize we are overwhelmed. I realized the system is antiquated. I realize changes need to be done moving forward, but we have to work with what we have now. We have to use every resource we can to better this situation.”

Roberts said officials are using what they learned assisting the people who gathered at the Capitol last week to hold in-person events across the state. There will be in-person services offered by OUI in Ashland and Owensboro next week. That service will also be expanded to Somerset, Hopkinsville, Northern Kentucky and Prestonsburg sometime after July 4.

Rep. Buddy Wheatley, D-Covington, asked what the procedure was for people who live in Kentucky but work in another state. Wheatley’s district borders Ohio. Benton said the “rule of thumb” was to apply for UI benefits in the state where one works.

“I’m with a lot of the other legislators here who have felt a great deal of stress related to this issue,” Wheatley said. “We like to have answers to questions.”

Carroll urged the governor's office to better communicate with legislators.

Education & Workforce Development Cabinet Legislative Affairs Director Heather Dearing testified that OUI couldn’t accept an offer to use legislative staff to process claims because those staff members hadn’t received the federally required background checks. She added, however, that OUI was working closely with the legislators' constituent services office to help resolve claims. Legislative staff also assisted with the Frankfort in-person services.

Committee Co-chair Rep. Russell Webber, R-Shepherdsville, asked whether an $865 million no-interest loan Kentucky received to pay for all the UI claims would increase the contribution rate small businesses pay into the state’s UI trust fund. “These businesses have really been hit hard,” Webber added. “A hit with a rate increase I think would be detrimental to a lot of these businesses.”

Benton said what businesses pay into the trust fund would go up unless there was legislative action taken in conjuncture with the executive branch.

Rep. Charles Booker, D-Louisville, asked what legislators could do at this point to move forward and help.

“Do we want to be dependent upon the federal government on how we run the public workforce system?” Benton said in response. “Is there an opportunity to provide stability of funds and other resources to make sure we don’t have the ebbs and flow of seasoned staff and service coverage moving forward?”

Roberts added that the UIO budget went from $41 million in 2010 to $25 million in 2018, causing the loss of 95 employees and the closing of 29 regional offices. “Gov. (Andy) Beshear is very frustrated as you are and as all of our constituents are,” Roberts said. “We have recognized that we cannot do enough with the staff that we have.”

Roberts said Beshear has directed the OUI staff to negotiate with an outside vendor for assistance with claims. “Without that, it would take us several months to get through all these claims,” Roberts said, adding he hopes by Monday the governor will be able to announce the state has hired a company with UI experience in other states to help.

Carroll expressed frustration that a contractor with experience processing claims, and not just answering phones, wasn’t hired months ago and pledged to continue to revisit the problems processing UI claims in future committee meetings.