Beshear aide: It will take years to modernize Kentucky’s unemployment system

Like a leaky ship, a growing number of holes have been sinking Kentucky’s unemployment office since the beginning of the COVID-19 pandemic.

There was the overwhelming surge in unemployment claims when most businesses shut down in the beginning of the pandemic, confusing guidance from the federal government over who qualified for money, bungled leadership, depression era-lines forming outside of the Capitol, and a surge in fraudulent claims, to name a few.

On Tuesday, outgoing Labor Cabinet Secretary Larry Roberts told a legislative committee that was formed to find solutions for the troubled system that it may be two to three years before the state can plug its biggest hole — fixing the antiquated technology used to process claims.

“If we can modernize our system, that’s going to make a big difference,” Roberts said. “And we’re continuing every day to look to see if there are things we can do even before this RFP is awarded because it may take two to three years before that is an outcome.”

Roberts said Gov. Andy Beshear’s Labor Cabinet is in the “latter stages” of finalizing a request for proposals to replace the decades-old computer system. The project is expected to cost around $40 million.

Those changes, though, will likely be “too little, too late” for Kentuckians who have been struggling to get their unemployment claims processed during the pandemic.

Roberts and his top executive in the unemployment insurance office, Buddy Hoskinson, shed little light on why there are still people who have been unable to get their claims processed, or why it will take two to three years to get a new program up and running or what tangible steps they’re hoping to take in the interim. After the meeting, they refused to take questions from the press.

The majority of Republicans who make up the Unemployment Insurance Reform Task Force instead focused more on other aspects of how the Labor Cabinet has handled the unemployment office, such as its $14.5 million contract with Ernst and Young to process claims and the fact that the unemployment system wasn’t modernized under the administration of former Gov. Steve Beshear.

Andy Beshear has often criticized his immediate predecessor, Republican Matt Bevin, for making deep cuts in the unemployment system.

When Hoskinson said he could use about 100 more people in his office going through claims, Sen. Ralph Alvarado, R-Winchester, asked why the cabinet had turned down help from the staff of the legislative research commission, a decision made by different officials at the beginning of the pandemic.

Rep. Phillip Pratt, R-Georgetown, asked why one of his own employees was able to collect unemployment after walking off the job and never returning to the office. Hoskinson said he was unable to help without knowing the specifics of the case.

After the Beshear Administration officials had cleared the room, the task force settled into harping on the extra $300 a week in federal funds some people on unemployment are receiving. Many business owners have blamed the extra funding for their struggles to hire employees in recent months.

Kentucky’s unemployment rate was 4.5 percent in May, below the national average of 5.8 percent, though the state has fewer people actively participating in the labor market than the national average.

Beshear has said he plans on creating an incentive system to encourage people to return to work rather than stopping the federal unemployment money before it is scheduled to end later this year. He has said some people may not have returned to work due to childcare issues or legitimate concerns about their safety as the pandemic recedes.