Kentucky's Capitol
(2009-11-19)
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Helen Mountjoy, who chairs the Governor's Task Force on Unemployment Insurance, says the panel needs more time to finish its work. The group is searching for ways to restore solvency to the state's bankrupt unemployment insurance trust fund. For now, the state is borrowing federal dollars to pay jobless benefits.
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Earlier this year, Kentucky's unemployment insurance trust fund went broke. To keep paying unemployment benefits, the state started borrowing money from the federal government. That debt has now risen to a half-billion dollars. But Helen Mountjoy, who chairs a bipartisan task force seeking solutions to the problem, says the group needs more time.
"The members have agreed to keep meeting and talking about the issues," Mountjoy told the Labor and Industry committee. "They have requested some additional information from our consultants, and we will be scheduling another meeting that will take place, probably the first week of December."
Kentucky's not alone with this problem. At least 23 other states are also borrowing federal dollars to keep benefits flowing to jobless workers.
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After the meeting, Mountjoy spoke to Kentucky Public Radio. She was asked if the federal government possibly would forgive the state's half-billion dollar debt.
"We've heard lots of talk coming out of Washington," said Mountjoy. "We haven't seen any specific plan at this point that talks about forgiving that debt.
"So, at some point, the state's going to have to ante up?" asked McVeigh.
"That is the assumption under which we are operating," said Mountjoy.
Mountjoy says there has been some discussion in Washington about forgiving the interest on the federal loans received by states, but not the principal.
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