'This just isn't good government': MO lawmakers look to waive unemployment overpayments

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Posted at 7:19 PM, Feb 09, 2021
and last updated 2021-02-09 20:23:56-05

KANSAS CITY, Mo. — Missouri lawmakers on both sides of the aisle are putting pressure on Gov. Mike Parson to waive overpayment notices sent out by the Department of Labor.

For months, 41 Action News has been reporting on the issue, Missourians tell us has caused extreme stress and frustration.

Missouri lawmakers held a hearing last week to discuss the overpayments with Labor Director Anna Hui.

State Rep. Jered Taylor, (R-District 139), chair of the Special Committee on Government Oversight, said Hui told lawmakers the state has overpaid 40,000 to 50,000 residents.

"We don't know if that's it or if that's going to get larger," Taylor said. "The director said it could be a larger number than that."

RELATED: Unemployed Missourians struggle for answers about overpayment notice

Missourians, like Independence resident Cheray Johnson, have been receiving notices they owe back their benefits for months.

Johnson said she quit her job in Missouri in February 2020 for a better-paying job in Kansas. However, she was laid off several weeks later due to the pandemic. Johnson said the Kansas Department of Labor instructed her to file for unemployment in Missouri. Johnson said she explained her situation about quitting her job to Missouri Labor representatives and immediately started receiving benefits.

Several months later, she received a notice saying she had been overpaid and now owes back more than $8,000. She's since received letters saying the state can garnish wages and take income tax refunds for the overpayment amount due.

"Every night I have a hard time sleeping just because I don't know any day now if they're going to garnish my wages," Johnson said.

Johnson said she's afraid to file her taxes for fear of her refund going to the state.

The federal government, according to Taylor, gave authority to states to waive overpayments when the CARES Act was passed.

"They knew this was probably going to be an issue," Taylor said. "We unfortunately have not done that, and it's the bulk of the money – 80% of the money is federal and 20 is on the state side."

Taylor said Hui told lawmakers an insignificant amount of the overpayments were due to fraudulent claims.

"Most people did not attempt fraud, or they weren't trying to deceive or fraud the government," Taylor said.

Taylor said another part of the problem could be that the state waived a one-week waiting period that would normally catch errors in order to expedite payments.

"I think it was directly the department's fault that a lot of these overpayments went out and we have this issue," Taylor said. "I think if we wouldn't have waived that, we possibly could have caught these overpayments or at least lessened the blow."

RELATED: Missouri unemployment claimants believe overpayment notice was sent in error

Taylor, along with several other lawmakers, have introduced bills addressing the issue. Taylor's bill, which includes an emergency clause and would go into effect as soon as the governor signs it, would waive federal portions of overpayments.

Taylor said he has heard numerous stories of Missourians struggling to get on their feet while being told they owe the state anywhere from $8,000 to $15,000.

"This just isn't good government," he said. "I'm a fiscal conservative. You won't find anybody more fiscally conservative than I am, but I know that we screwed up and this is a problem we're going to have to address."

State Rep. Crystal Quade (D-Springfield), also House minority leader, said Parson has remained adamant that anyone who received benefits in error should pay them back.

"We have been having conversations with the governor, trying to push him on this issue," Quade said. "He is very steadfast on not changing his mind on that money having to go back."

Quade said the federal government is not requiring states to send back the money.

"The state of Missouri wouldn't even keep it," Quade said. "We would send it back to the federal government, so it's not something that would even help our general revenue here in Missouri."

Quade said her office has received a significant amount of calls from worried Missourians and encouraged people dealing with this to continue to share their experiences.

"Every single person that reaches out to us gives us even more credibility in the arguments that we're making," she said, "and we can continue to apply pressure to the governor, but also the leadership in the House and Senate to try to get this legislative fix through as fast as we can."

Taylor said there will be a hearing on his bill at 2 p.m. Wednesday. He's hoping it's on the House floor as early as next week and moved over to the Senate the following week.

41 Action News reached out Parson's office, and a spokesperson said his position on the issue has not changed.

An interview also was requested with Labor Director Anna Hui. The request was declined and questions were not answered via email.