After months of unprecedented unemployment insurance benefits claims amid the COVID-19 global pandemic, Kentucky’s fund for those claims is at $0 and the state is having to borrow money from the federal government—which will translate to a hit for employers.
In a letter sent to Gov. Andy Beshear on Thursday, a large coalition of groups representing both for-profit and nonprofit entities including the Kentucky Chamber of Commerce, metro chambers from Louisville, Lexington and Northern Kentucky, the Kentucky Hospital Association, Kentucky Association of Counties, Kentucky Retail Federation, Kentucky Restaurant Association, and many more stressed the importance of addressing the issue and expressed shard concerns regarding the stability of the fund.
Recent testimony in front of lawmakers from state officials and Kentucky Chamber President and CEO Ashli Watts highlighted the fact that the state has already taken out a loan from the federal government for more than $800 million to ensure claims are paid and employers across the state are facing huge costs to replenish the fund despite being shut down for many weeks to ensure the safety of Kentuckians.
“As we enter in the sixth month of the pandemic, it is clear many more Kentucky businesses will not survive due to mandated closures, decreased patronage, lost revenue, increased costs and many other issues. Hitting employers with a massive tax increase come January 2021 is truly “kicking us while we are down.” Worse, Kentucky’s unemployment rate will remain high if more businesses are forced to close their doors,” the coalition wrote in the letter.
To deal with this issue, the group asked the governor to use any CARES Act money that is yet to be allocated and give a much-needed infusion to the UI Trust Fund and include any costs of self-insured nonprofit employers not covered by the CARES Act or future legislation.