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Kansas plan puts $450M in COVID funds in unemployment system

Sean Tarwater
Virus Outbreak-Kansas
Posted at 6:19 PM, Feb 26, 2021
and last updated 2021-02-26 19:19:39-05

TOPEKA — Republican lawmakers in Kansas advanced a new proposal Friday to put $450 million in COVID-19 relief funds from the federal government into the state's unemployment program to help cover losses from fraudulent claims.

GOP members of the House commerce committee included the measure in a bill aimed at overhauling the unemployment system and giving lawmakers more control over an upgrade of computers at the state's Department of Labor. The committee approved the bill on a voice vote, sending it to the full House for debate, possibly as early as next week.

The Department of Labor's problems in keeping up with a flood of filings for benefits from jobless workers and combatting bogus ones have emerged as a major issue since last summer. GOP lawmakers are worried that employers, who pay taxes to finance unemployment benefits, will be on the hook to cover fraudulent claims and that the state will be forced to cut parts of its budget if it tries to protect employers.

Republicans in the GOP-controlled Legislature have been increasingly critical of Democratic Gov. Laura Kelly over the department's problems. The department estimates that the state paid $290 million in fraudulent unemployment claims last year. But a legislative audit released Wednesday put the figure at roughly $600 million, and some Republicans argue that it could be higher.

"We've got to find it somewhere," said commerce committee Chair Sean Tarwater, a Stilwell Republican.

Kelly this week urged congressional leaders to approve another federal COVID-19 relief package that includes funds for states to bolster their unemployment programs.

But her push does not have the backing of the state's two GOP U.S. senators or the Republicans who hold three of the state's four seats in the U.S. House. The five lawmakers sent her a letter Friday, chiding her for what they described as her administration's inadequate response to various problems in the state's unemployment program.

"It is not a solution to continue throwing money in a direction where the process is the problem," the Republicans wrote.

The state saw a spike in unemployment claims in April after Kelly issued a statewide stay-at-home order to control the spread of COVID-19. The legislative audit suggested that scammers targeted a new benefits program in the summer and the regular unemployment program at the end of the year.

Kelly and the state Department of Labor have blamed many of the agency's problems on decades-old computer technology, and Kelly has included $37.5 million in her proposed budget for upgrades. The legislative audit said scammers used "large-scale identity theft" to cheat the unemployment program, and Attorney General Derek Schmidt said in an interview this week that scammers appear to be mostly "offshore."

Some Democrats were wary of the GOP proposal to set aside COVID-19 funds, worried that it could divert money from other relief efforts. Tarwater predicted that Congress would provide plenty of money.

The commerce committee's top Democrat, Rep. Stephanie Clayton, of Overland Park, asked, "Can we do that with federal money?"

When Tarwater told her, "It wouldn't be here if we couldn't," she replied, "Uuuuuuuuuhhhhhhhhhhh, I just - I've got some heartburn over this."

The bill also sets up a new council to oversee the modernization of the state Department of Labor's computers and requires the agency to finish the upgrades by the end of 2022. Tarwater said the goal is a "long-term fix," but department officials have told the committee that its timeline is not realistic.

The discussion of the unemployment legislation came as the state continued to report a decline in new COVID-19 cases. Kansas saw an average of 404 new confirmed and probable cases a day for the seven days ending Friday, its lowest rolling seven-day average since mid-August, according to state Department of Health and Environment Data.

The health department added 826 cases since Wednesday to the state's pandemic total, bringing it to 293,663 since early March 2020, or one case for every 10 of the state's 2.9 million residents. Kansas also reported another 11 COVID-19 deaths since Wednesday, bringing the total to 4,735.

Meanwhile, Kansas legislators are considering changes to the state's emergency management laws following months of Republican criticism of Kelly's handling of the pandemic.

The House Judiciary Committee plans to vote Monday on a bill that would preserve the control that lawmakers granted last year to local officials over mandating masks as well as restricting businesses and public gatherings. It also would require the governor to get legislative leaders' approval before issuing an executive order during a pandemic.

The Senate Judiciary Committee approved a measure Thursday that would impose new limits on state and local officials' power during public health emergencies. It also creates a new legislative committee with a broader membership to consider the governor's executive orders in advance.
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