David Williams ramps up his call for a special session on unemployment insurance payment

08/17/2011 07:52 AM

LOUISVILLE — Republican Senate President David Williams told regional economic development officials that Democratic Gov. Steve Beshear should call the legislature into session immediately to approve an interest payment to federal government that’s due Sept. 30.

Kentucky owes the U.S. government $28 million in an interest payment on nearly $1 billion in loans to pay for unemployment benefits for out-of-work Kentuckians in this recession.

Williams, who is running against Beshear in this fall’s governor’s race, said making that payment is one of several issues Beshear has tried to sidestep or put off. Williams has also criticized Beshear for not pushing for changes to the state employee pension system or retooling the Kentucky’s tax code.

The interest payment on the emergency unemployment insurance funds is most urgent, he said at a forum in Louisville sponsored by the Kentucky Council of Area Development Districts.

Currently, Democratic Gov. Steve Beshear’s administration is waiting to hear whether the federal government will cut Kentucky some slack, such as not slamming the state with additional interest or penalties if it can’t make the full $28 million payment by Sept. 30.

But in the long-term, it’s looking more likely that the Kentucky businesses will have to pay additional money per employee into the Kentucky unemployment insurance trust fund, as drawn up in 2010 legislation.

In an interview with Pure Politics, Williams said businesses are not to blame, nor should they shoulder the blame for Kentucky’s large unemployment insurance loan.

Williams was part of the legislature in 1998 and 2000 when lawmakers lowered the amount businesses paid into the Kentucky unemployment trust fund while also increasing unemployment benefits. Those two moves accelerated the rate at which the fund went dry during this recession, prompting Kentucky to borrow the $960 million.

In a 2010 special session, the business community and lawmakers agreed to lower the benefit levels to out-of-work Kentuckians and put employers on the line to pay more in fees to help pay off the federal loan. At that time, Williams and other Senate Republicans called for lowering benefit levels to unemployed workers even more because only Oregon still offers more generous benefits than Kentucky.

-Reporting and video production by Kenny Colston


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