State will spend $7.4 million in July for help of private firm to deal with unemployment insurance claims

As Kentucky continues to struggle with unmet needs of those who have filed for unemployment insurance benefits during the COVID-19 pandemic, Kentucky Gov. Andy Beshear announced Tuesday a $7.4 million contract with a private firm to add 300 individuals to help the state process claims.

The contract with Ernst & Young will begin on July 1 and add 200 employees starting Monday to process unemployment insurance claims. An additional 100 individuals will begin work in the coming weeks. The four-week contract will be paid for with CARES Act funding.

Beshear said the contract employees will start processing the oldest unmet claims dating back to March and work forward. The new employees will be call and/or email Kentuckians who have filed the claim to address the issues directly. Kentucky currently has around unmet 56,000 claims from March-May it will look to address.

The governor said he believes this is the best way to address the unemployment insurance issue in the short term, and he hopes this contract shows “help is on the way and we are spending what we have to to get it done.”

In the press conference, Beshear also discussed the financial impact of the pandemic and shutdown on the state’s economy. He stated Kentucky currently faces a $1.1 billion budget shortfall in 2021, which could result in potential cuts of 16-29 percent to many areas of state funding, higher than any cut the state has seen.

Beshear said he would like to see federal help for the states to help with budget deficiencies, adding that if Congress does not provide additional funding it would be “effectively bankrupting Kentucky.”

Beshear noted most members of Kentucky’s federal delegation have not said no to this idea and added it is an important discussion as the lack of revenue in the state will impact all areas of government and all Kentuckians.