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Ky. lawmakers advance bill to ease recent cuts to unemployment benefits

unemployment insurance claims sign on glass window
Erica Peterson

A major cut to unemployment benefits that went into effect in Kentucky earlier this year would be softened under a bill advancing in the state legislature.

The maximum amount of time Kentuckians can collect unemployment was reduced from 26 weeks to 12 weeks following the passage of House Bill 4 last year.

But under House Bill 146advancing during this year’s legislative session,Kentuckians would be able to collect four more weeks of unemployment — 16 weeks.

Rep. Russell Webber, a Republican from Shepherdsville and sponsor of the proposal, said it “does not change the overall intent” of the initial policy, which he said was to “promote rapid reemployment and maintain or build the trust fund sustainability.”

Kentucky’s unemployment trust fund, which is financed by employment taxes and pays for jobless benefits, took a hit during the coronavirus pandemic amid a surge of claims.

The unemployment policy that went into effect at the beginning of this year ties the period of time someone can collect jobless benefits to the statewide unemployment rate, a move some conservatives say encourages unemployed people to find a job when economic conditions allow.

If Kentucky’s employment rate is less than 4.5%—as it is currently—an unemployed person can only collect benefits for a maximum of 12 weeks.

Critics argue the statewide policy ignores local economic struggles because parts of Kentucky have unemployment rates that far exceed the statewide rate.

At the end of last year, Oldham County had the lowest jobless rate at 2.4% and Magoffin County had the highest at 9.4%.

Dustin Pugel, policy director for the progressive think tank Kentucky Center for Economic Policy, said this bill is an improvement, but doesn’t restore enough of the cuts made last year.

“I think most folks are probably still unaware of House Bill 4 from last session, so I would just say if you are an unemployment insurance claimant, you need to get ready for what is likely going to be a much sooner end to your benefits than you're used to,” he said.

Pugel also pointed out that the new measure does not change the “suitability standard” enacted by last year’s bill, which requires people to take any job offered to them after six weeks of benefits if it pays more and is within 30 miles of their home, even if it’s outside a claimant’s skill set.

The bill would also require the state Office of Unemployment Insurance to inform applicants of additional weeks of benefits for completing an improved job training and certification program along with other available resources.

The idea of tying unemployment benefits to the statewide unemployment rate is a concept known as “indexing” and is being promoted by conservative groups such as the Foundation for Government Accountability.

When the Kentucky House of Representatives debated House Bill 4 last year, several rural Republican lawmakers nearly derailed the effort, arguing that the measure would disproportionately hurt their districts, which generally have much higher unemployment rates than the state average.

During the committee hearing on Thursday, Rep. Al Gentry, a Democrat from Louisville, said he liked the part of the bill that moved up the floor of unemployment benefits from 12 weeks to 16 weeks.

“I was vehemently opposed to House Bill 4 last year, he said. “I thought it was not taking us in the right direction in a couple clauses as it relates to workers. But these are changes to that bill and these changes are favorable.”

The bill passed out of the House Economic Development and Workforce Investment Committee on Thursday and will now be considered by the full House.

Investigative Reporter Lily Burris is a corps member with Report For America, a national service program that places journalists into local newsrooms. Email Lily at lburris@lpm.org.