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Kentucky Prepares to Reduce Jobless Aid, Employer Contributions

The state Senate approved two bills that would cut unemployment insurance benefits and lower employer contributions to pre-pandemic levels. If the House accepts the bills, they will head to Gov. Beshear’s desk for signature.

(TNS) — The General Assembly is ready to reduce jobless benefits for laid-off Kentucky workers while also spending $242 million to shrink the payments required of employers to the state's unemployment insurance trust fund.

The Senate last Thursday approved House Bill 4, cutting unemployment insurance benefits, immediately followed by House Bill 144, lowering employer contributions to the trust fund back to pre-pandemic 2020 levels.

Both bills return to the House, which must agree with changes made in the Senate, before going to Gov. Andy Beshear. Beshear opposes the benefits cuts included in HB 4, but he has not said if he would veto the bill.

The politically powerful Kentucky Chamber of Commerce and other business groups have lobbied hard for both measures. The Chamber alone spent more than $40,000 lobbying the legislature in January.

Supporters say reducing jobless benefits will prod people back into the workforce faster. HB 4 would shrink the length of time that unemployment insurance is available, down from the current 26 weeks, by indexing it to the statewide unemployment average during a recent three-month span.

It also would add rules requiring people to search for work more frequently and take "suitable" jobs in their region more quickly.

Too many Kentuckians are lingering on jobless benefits for too long, supporters of the bill say.

"We have to recognize the fact that we have a huge problem here in Kentucky with workforce participation," said Sen. John Schickel, R- Union, during an hour-long Senate floor debate.

"I come from a part of the state where everywhere I go, employers are crying out for help, for employees," Schickel said. "And I'm not just talking fast-food places. I'm talking from entry-level employment to very good-paying, career-level jobs."

Critics say the bill could force Kentuckians to take an ill-suited job within six weeks that paid barely half of what their last job paid. Among the reasons people haven't returned to work faster, they say, are a lack of child care, few jobs in their chosen field that offer fair compensation and health concerns due to the COVID-19 pandemic.

In both the House and Senate, some Republicans from rural Eastern Kentucky split from their colleagues in the GOP majorities to protest parts of the bill as unfair to their constituents.

In particular, they opposed using the statewide unemployment average to determine when a laid-off worker's benefits should end, because some rural areas have much higher unemployment rates than the "Golden Triangle" of Louisville, Lexington and Northern Kentucky.

Sen. Phillip Wheeler, R- Pikeville, wept on the Senate floor while he spoke about the bill's possible impact on his region, and he quoted Proverbs 19:17: "Whoever is kind to the poor lends to the Lord, and He will reward them for what they have done."

"I fear this bill will cause great misery in my home," Wheeler said. "I'm all for business succeeding, and I'm all for people working. I've also seen many generations where the cycle of poverty has broken men's souls, caused them to turn to drugs and ruined the moral fabric of many communities that once stood strong."

"I've also seen many of the same people who are promoting this bill promote the outsourcing of jobs, the closure of factories, whose only goal is the bottom dollar instead of the success of this nation and this state," Wheeler said.

Other senators said HB 4 will fail in its stated goal to increase the state's workforce participation rate, because the people collecting unemployment insurance are, by definition, workers who were laid off from their last jobs, not idle loafers. People who quit their jobs or who have never worked are not eligible for jobless benefits, they said.

"This bill is directed against working people," said Sen. Johnnie Turner, R- Harlan. "You have to be working to get laid off. And it simply is going to cut the payments of working people who get laid off by many weeks."

The Senate voted 22-to-13 to approve HB 4.

The second measure, HB 144, was less controversial, although some senators said it was hypocritical to cut aid to laid-off workers while providing relief to employers.

Under the bill, the state of Kentucky will spend $242 million in American Rescue Plan Act money to replenish the state's unemployment insurance trust fund to its level before the sudden COVID-19 shutdowns threw tens of thousands of Kentuckians out of work. Doing this and suspending the taxable wage base will save employers an estimated $70 per worker in UI taxes.

The Senate voted 29-to-5 for HB 144.

(c)2022 the Lexington Herald-Leader (Lexington, Ky.) Distributed by Tribune Content Agency, LLC.
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