Kansas officials said Monday they are reviewing what the weekend announcement by President Donald Trump that states may be forced to contribute to a new unemployment assistance program will mean for their bottom line.
The executive order unveiled by Trump on Saturday creates a new $400-a-week unemployment assistance program to help those experiencing financial turmoil during the pandemic, with the president indicating that $100 of that weekly payment will come from the states. It is designed to fill the gap of the current $600-a-week assistance payments that expired Aug. 1.
The program would apply to those making over $100 per week in unemployment benefits, which would account for most who use the program. Low-wage workers and those who make most of their money in tips could be excluded, however.
Acting Labor Secretary Ryan Wright warned in a statement that diverting resources to fill in that hole could make it more difficult for Kansans to receive unemployment payments altogether.
"If we divert those resources to try and implement a plan that may not be permanent and may not even be legal, it could ultimately prevent Kansans receiving those benefits in a timely manner when a more permanent solution is just around the corner if Congress acts," Wright said.
With Kansas facing a $650 million budget hole because of the pandemic, a situation it shares with virtually every other state in the country, concern about a potential further strain on state resources is palpable.
That is especially true at the Department of Labor, which has been plagued by issues in connecting residents with benefits.
Former Secretary Delia Garcia stepped down last month amid the frustration, though Gov. Laura Kelly has attributed many of the issues to understaffing and underfunding under the administration of ex-Gov. Sam Brownback.
The state’s unemployment trust fund was "in a very healthy position" before the pandemic, Rep. Troy Waymaster, R-Bunker Hill, said in an interview, and still had somewhere on the order of $600 million remaining in it that could be tapped if necessary to pay the state’s portion.
"It would be that unemployment that we would be looking at in having those dollars paid from," he said.
But, Waymaster said, the amount of money could add up for the state and he floated a zero-interest loan from the federal government, something at least one other state has inquired about.
"It could be a considerable amount of money," he said, saying it would "eat away at the (balance) pretty quick" if other solutions, such as a loan or using some of the state’s remaining CARES Act funds, were not used.
Initially, Trump signaled that states that refused to pony up the $100 portion would go without the assistance altogether, saying the choice is "up to them."
But he appeared to walk that position back Sunday, telling reporters that states would apply for federal relief and that the amount they would be asked to contribute could vary.
"We have a system where we can do 100% or we can do 75%, they pay 25(%), and it will depend on the state," he said. "And they will make an application. We will look at it, and we'll make a decision."
There also are questions about whether the payments will be available immediately or whether it will take time to get the program up and running. Many lawmakers have expressed concern that any delays would leave residents out in the cold.
Wright cautioned in his statement that the announcement from Trump was only preliminary and "there is more to learn about the specifics."
Lyle Butler, chair of the state’s COVID-19 recovery task force, echoed that sentiment in remarks Monday before the State Finance Committee.
Butler underscored that the past weekend underscores the "revolving nature" of the federal funding discussions.
"We are aware of changes at the federal level and how they may impact our way forward," he said of the unemployment announcement.
Trump’s announcement came after negotiations among congressional leaders over a longer-term relief package stalled late last week, with members leaving Washington without reaching a deal.
Some have speculated that the announcement is a way of pushing congressional Democrats back to the negotiating table in an effort to secure a legislative deal.
"We need Congress to work together and come up with a more permanent bipartisan solution that works for all families and businesses," Wright’s statement said.