The Kansas Chamber of Commerce issued a statement Thursday voicing its concerns with the recent announcement that Kansas’ unemployment fund is running dry.

The Kansas Department of Labor said Wednesday the Unemployment Insurance Trust Fund might be entirely depleted by November.

The Chamber report says that the KDOL failed to mention to legislators during the 2009 session that there was a possibility unemployment resources could run out in the near future, and in fact told legislators the unemployment fund was in decent shape.

According to the Chamber, KDOL Secretary Jim Garner testified in April to legislators there would be sufficient dollars to fill the unemployment fund beyond 2010.

"It is disturbing that the statistical analysis utilized by the Kansas Department of Labor could produce such contrasting data in such a short period of time,” Kansas Chamber CEO Amy Blankenbiller said in the statement. 

“The Kansas Legislature and the Employment Security Advisory Council cannot be expected to protect the integrity of the Employment Security Trust fund without accurate and consistent projections about disbursements and known impacts," she said. "The extension of time benefits were paid, the expansion in eligibility and the steady rise of unemployment are all factors that were identified in April and were projected by the department to have a minimal impact on the fund.  The sudden shift to projected depletion based on these same factors is outrageous."

In the KDOL report, Garner said the unemployment fund would be replenished through borrowing funds from the United States Treasury.

"Our first priority is to ensure unemployed Kansans receive the benefits that help them get through this difficult economic time as they return to work," said Garner. "For that reason, we have begun communicating with the U.S. Department of Labor so that we are prepared to seek advances from the U.S. Treasury for our Unemployment Insurance Trust Fund when necessary.”

The Kansas Chamber said it has requested to meet with Garner, Gov. Mark Parkinson and key legislators to “determine the real state” of the unemployment fund.

Kathy Toelkes, spokesperson for the KDOL, said the information Garner provided legislators in April was based on the best data available at the time.

"Since then, even the (Congressional Budget Office) has changed its projections on unemployment, which in turn affects our projections," Toelkes told Kansas Liberty. "It’s worth noting, as well, that in the first quarter of 2009, our state’s Trust Fund was ranked 19th among 54 nationwide by the USDOL. Clearly, there have been significant changes to take us from among the healthiest funds in the nation to where we now anticipate depleting funds before the end of the year."

Toelkes said over the last few months there has been a drastic increase in the benefits being paid out from the fund. In February $55 million was paid out and by June the number of benefits paid had increased to $78 million.

"As soon as we became aware of the potential of the fund to exhaust we shared that information and began preparing to ensure funds would be available to pay unemployment benefits as needed," she said.

The June 2009 KDOL report on unemployment payments showed that there were 25,767 initial claims for unemployment benefits in June and 242,395 continued claims for unemployment benefits.  By contrast, in June 2008 there were 10,006 initial claims and 85,721 continued claims.

The report also showed that Kansas businesses have lost 53,100 jobs since 2008. Republican "moderates" and Democrats have consistently resisted calls to ease the tax burden on state businesses as a way of preserving jobs.

Kansas is one of 18 states that is borrowing from the federal government to patch holes in unemployment funds. Kansas' unemployment rate is 7 percent.

Resources

KDOL report
http://www.dol.ks.gov/HOME/NewsReleases/ui/ben2009.html

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