Kentucky Governor to Protect Unemployment Benefits

Kentucky’s Democratic Governor Steve Beshear has announced a bipartisan task force to recommend long-term changes to the Unemployment Insurance Trust Fund, to ensure its long-term viability.

Due to the enormous demands of the global economic meltdown, Kentucky, like many states, is depleting its UI Trust Fund at an accelerated rate. Kentucky now has about $50 million in the fund, representing more than two weeks of payments on claims. That’s down from $116 million in December and $175 million in October.

Under provisions of the Social Security Act, the federal government makes funds available to states so that unemployment insurance benefits are not interrupted. As a first step, Beshear has asked the Department of Labor to prepare a line of credit that would be made available to Kentucky when the time is appropriate.

Since 2002, Kentucky has paid out more in unemployment benefits each year than it has taken in through employer contributions. The difference has been made up by drawing down reserves that were accumulated in earlier years in the UI Trust Fund.

The task force, composed of employers, employees and members of the General Assembly, will make recommendations to enable the system to generate sufficient funds to temporarily assist displaced workers.