'Sacrifice' needed for unemployment insurance fix

05/25/2010 02:08 PM

FRANKFORT — In an effort to stop Kentucky from borrowing federal money for unemployment insurance — already at $1.2 billion — a House committee approved a bill Tuesday that required compromise and sacrifice from businesses and workers.

It was the second time in 2010 that the House Committee on Labor and Industry approved the unemployment insurance trust fund legislation. The bill passed the House 97-0 in this spring’s regular session but stalled in the Senate.

The fund has been underwater for months, forcing Kentucky to borrow the $1.2 billion from the federal government. The recession flooded the ranks of the unemployed in Kentucky, as well as every other state, which drained the account faster than regular payments from businesses could keep up.

This bill, House Bill 5, aims to stop the trust fund’s financial bleeding by getting businesses to pay more and those out of work to receive smaller benefit checks. Those changes take effect starting in 2012.

If it works, the increased payments by companies and smaller unemployment benefit checks should stop the state from having to borrow money by 2015 and would create a solvent fund by 2020, lawmakers said.

The changes are also based on how the economy fares. The bill assumes a stronger economy by five years and many of the increases and decreases are based on that notion. A longer recession, or even another one, could throw everything off track.

It took Kentucky four years to find a solution to the same problem with an upside-down unemployment insurance trust fund in the 1980s.

The committee spent little time debating it Tuesday morning. But political snags still could lie ahead for the legislation if House and Senate leaders have to negotiate.

“Any changes kills the bill,” said Rep. Larry Clark, the Democratic House speaker pro tem from Louisville who sponsored the measure.

Rep. Joni Jenkins, D-Shively, said lawmakers and representatives from business and workers’ groups who participated in an unemployment insurance fund task force all made sacrifices to hammer out the bill.

“It was historic how everyone worked together for this bill,” Jenkins said.

Rep. Charlie Siler, a Republican, went through extra efforts before voicing his yes vote to make sure everyone was aware of the teamwork all sides participated in to come to agreement on House Bill 5.

“I attended every meeting for this bill except one,” Siler said. “I applaud the industry people and the union people. This is the most evenly distributed of shared sacrifice a bill like this has ever carried.”

During Tuesday morning’s hearing, lawmakers repeated two key words when describing the legislation: “compromise” and “sacrifice.” As is often the case in politics, they said they were pleased the proposed fix might work, but hardly overjoyed at what it meant for businesses or workers.

Larry Roberts, the state director for the Kentucky State Building and Construction Trades Council, stopped short of saying he was happy with the bill but noted that the compromise made him “satisfied.”

“There were concessions made on the workers side and on the business side,” Roberts said. “The fix won’t happen overnight, but it’s reasonable.”

And Clark, the bill’s sponsor, noted that almost any changes to the current bill would need to be approved by a regional federal unemployment office in Atlanta, certainly derailing the bill from the five-day standard that many legislators are putting on bills to be passed during the special session.

With much still left up in the air on Tuesday, those in committee and the bill’s supporters hope this time around, a fix can finally be made.

“Everyone sacrificed, it was really disappointing when it failed in the Senate,” Jenkins said. “But I hope we can get it passed.”

- Kenny Colston

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