KANSAS CITY, Mo. — Kansas lawmakers are putting finishing touches on legislation to oversee upgrades at the Department of Labor.
The House and Senate have both been working on their own versions of bill 2196. It would create an oversight council made up of representatives of employers, representatives of employees, lawmakers and representatives from the Department of Labor.
White House economist Jared Bernstein, said Kansas isn't alone in drafting legislation to modernize its unemployment insurance system.
"I've been an economist in government for many decades and it seems every time we hit recession, we have to kind of reinvent our unemployment insurance systems," Bernstein said.
Bernstein said one of the problems is likely states dis-investing in unemployment systems.
"That's something that is I think a very important policy mistake at the state level because you know it's when the sun is shining that you want to fix that roof," Bernstein said.
He adds it's important to keep in mind unemployment systems are dealing with record-breaking claims.
"This program has been called upon to meet a level of need that was historically unforeseen," Bernstein said.
Throughout the pandemic, the Kansas Department of Labor has compared stabilizing its 40-year-old information technology system to building a plane while flying it.
The system has led to a multitude of issues, including claimants like Overland Park resident Dave Rehnblom unable to get through on the phone lines.
"It immediately gives you the all operators are busy, the hold queue is full, you'll have to go online," Rehnblom previously told 41 Action News.
Lawmakers in the Kansas House and Senate are finalizing negotiations on Bill 2196.
Chair of the Senate Commerce Committee Sen. Rob Olson, (R) District 23, said lawmakers are down to just a few points of difference.
One of them addressing changing the current unemployment threshold. Currently, the state's unemployment rate must be at 5% for a claimant to receive 26 weeks of benefits.
Olson said the bill would lower the threshold to 4.5%.
"Kansas has always had a more generous benefit and this brings us more in line with the rest of the country," Olson said.
Olson said House lawmakers want the new threshold to go into effect as of April 1. The Senate wants it to be Sept. 5, when Olson said a lot of federal programs will be ending as well.
"I want to keep the department busy trying to fix the backlog, I don't want them spending all their time going in and trying to reduce the weeks for the state payments, but these people would still be entitled to federal payments," Olson said.
Another point of difference to work through addresses the state's depleted trust fund.
An audit released in Feb. by the Legislative Post Audit Division shows a 75% decrease in the fund over the course of a year. The audit shows the fund dropped from $1 billion in Jan. 2020 to $247 million in Jan. 2021.
There's still debate about how much of that money went to fraudulent claims.
Of the $2.6 billion the state paid out in state and federal benefits during 2020, the report estimates $600 million of it could have been fraudulent.
KDOL released its response to the findings saying the estimate is "flawed in underlying assumptions and methodologies."
The department released its own estimate on fraudulent pay-out at $290 million.
In the House's version of the bill, $450 million of COVID-19 relief money would go into the trust fund in one payment.
"When the House passed it, they didn't know how the COVID relief money was going to be coming, they thought we were going to get the $1.6 billion all in one, but we're getting it in two different pots," Olson said.
Olson said the Senate's version would put in $500 million in two separate payments of $250 million. An outside firm would do an audit to find out how much went to fraud before putting in the second payment.
Olson expects lawmakers to finish negotiations on the legislation Thursday and vote Friday. It will then be sent to Gov. Kelly's desk. He expects she will sign it.