(Updated with more complete reporting and edits throughout)
The State Finance Council on Thursday rejected Gov. Laura Kelly’s plan to spend $63 million to fund a $400-a-week unemployment benefit for Kansans.
The council voted 6-3 against spending the federal coronavirus relief funding that would have covered the state’s $100 match of the $400 benefit.
The vote means the governor will now ask the federal government for a $300 benefit to replace the $600 a week that Congress approved but expired at the end of July.
“I’m disappointed that Republican leaders on the State Finance Council continue to play politics during a public health crisis, instead of supporting the plan that was introduced by President Trump,” the governor said in a statement.
“Republican leaders in the Legislature have said they want to help Kansans who are struggling with the impacts of COVID-19, but the first chance they had to do something about it, they voted to make a political point instead of supporting the people of this state who need help,” Kelly said.
Republicans opposed the governor’s proposal to spend the relief funds on unemployment, saying it was needed more for coronavirus testing and child care if the state was interested in getting Kansans back to work.
They also expressed an interest in using the money to replenish the unemployment trust fund, which is expected to go insolvent by the first of next year because of the high volume of unemployment claims filed with the state.
“Quite frankly, I think the testing is the only way we get back to full employment,” said House Majority Leader Dan Hawkins.
“If we don’t spend the money to do the testing required we do not get people back to full employment,” Hawkins said.
“If we do that and get people back employed, we don’t need as much money going out every week from the unemployment trust fund,” he said.
Senate Majority Leader Jim Denning cited data showing that Kansas ranked 47th nationally in COVID-19 testing.
Kelly said her administration is now working with Johnson and Sedgwick counties about ways the state can expand its testing capacity.
Kansas’ unemployment rate for July came in at 7.2%, down from 7.5% in June and 10% in May. Last year, the state’s unemployment rate in July was 3.1%.
The state’s unemployment rate reached its highest point in more than 40 years in April, when it climbed to nearly 12% after businesses closed down as the state tried to contain the spread of the coronavirus.
The money for the $400 benefit would have come from about $300 million in coronavirus relief funding that the state has left from the original $1.25 billion it received from the federal government.
The money would have gone toward paying an estimated 80,000 Kansans $400 a week above their regular unemployment benefits.
Senate Minority Leader Anthony Hensley noted the timing of the Finance Council’s decision.
“Labor Day is Monday,” Hensley said. “I think we should recognize unemployed Kansans need our help.”
House Speaker Ron Ryckman Jr. said the best commitment the state could make to Kansas workers is to make sure that the unemployment trust fund was stable.
Senate President Susan Wagle said spending the coronavirus relief money on testing was the best way to help the economy.
“We can’t have recovery until we get control of the spread of the virus,” Wagle said. “We can’t get control of the spread of the virus until we have more testing.”
House Minority Leader Tom Sawyer wanted to see the state spend the money to help Kansans who are struggling without a job because of the economic difficulties brought about by the pandemic.
“We have a lot of Kansans who are suffering right now that are unemployed and are having a tough time paying their bills, their rent or their mortgage,” he said. “They need some help right now.
“This money will not only help them, but it will churn through the economy very fast,” he said. “It will help them and it will help the economy.”
Kelly said the decision to seek the $400 over the $300 was not only intended to help the unemployed but to help businesses as well.
“We need people coming in and buying their goods or their services,” Kelly told the council. “It is absolutely essential if we want them to survive through this.
“They need for people to have this money in their pockets to come into their stores and spend it,” she said.
Republicans also questioned why Kansas was undertaking something few other states were participating in
Denning, noted that just five states, including Kansas, are opting to provide the full $400 benefit with a 25% match from the state.
He said 43 states are seeking a $300-a-week benefit from the federal government, which doesn’t require a state match.
Denning said he supported increasing unemployment benefits to $300 a week, explaining it won’t have an impact on the state’s finances.
“I think the $63 million could be put toward more impactful, measurable programs such as testing or providing working parents with safe supervision for their children who have been forced to learn remotely,” he said.
