Apr. 6—The Kansas Department of Labor took a step forward in its effort to modernize the unemployment insurance system, state officials announced Tuesday, an effort that could eventually speed payments to out-of-work Kansans in future economic downturns.
The state released a request for proposals Thursday seeking a company to modernize the technology behind Kansas unemployment benefits.
The pandemic had pushed the safety net system into overdrive after unemployment claims swelled early last year, and officials long pointed to antiquated technology as an obstacle. A year into the pandemic, many Kansans continue to complain that the state labor department has struggled to pay out federal benefit programs.
Once the state receives proposals from companies seeking to complete the modernization work, state officials will conduct interviews in order to select one.
"We are on target to modernize this antiquated system," Gov. Laura Kelly said in a statement. "While we navigate the procurement process, we also need the legislature to fund this critical upgrade. It will not be cheap — fixing a system that has been neglected for 40-plus years never is — but failing to act is not an option."
States with modernized technology in their unemployment systems were better equipped to handle the historic surge in unemployment claims when the pandemic first hit last year, experts have said, and to pay out new claims on time as the crisis continued. At least 18 states have modernized unemployment insurance systems.
The modernization process can take anywhere from three to five years and could cost upwards of $40 million, labor department officials said. One official noted that because this effort started in 2019, in could be two-three years from now. Kelly requested $37.5 million for modernization in her budget request, under consideration by the Legislature.
"When I learned that the previous Administration abandoned efforts to modernize the state's unemployment computer system in 2011, I immediately tasked the agency with reviving its modernization plans," Kelly said.
The Kansas House and Senate each passed bills last month to give the department more oversight over the modernization process and set deadlines for completion.
The Senate version would allow legislative leaders to set a deadline while the House version insists the project be completed in two years. Both versions also set aside up to $500 million in COVID-19 federal relief dollars to refill the state's depleted unemployment trust fund.
Lawmakers are expected to negotiate on the terms of the final bill this week before voting again to send it to the governor.
"It doesn't matter who's the governor, the legislature is bound and determined to get this modernization," said Sen. Rob Olson, an Olathe Republican and chair of the Senate Commerce Committee.
Labor department staff traveled to states with modernized unemployment systems before the pandemic, according to the governor's office. The agency dedicated a team in the last year to speed up and finish the modernization process in Kansas, based on findings from other modernized states.
Kelly said her administration planned to upgrade the technology prior to COVID-19, but had to suspend those efforts when the pandemic forced a need to stabilize the decades-old system instead.
Officials say the system is largely stabilized today and is paying out benefits. Hundreds of out-of-work Kansans continue to complain that they haven't received all their unemployment and are unable to reach the agency through the call center. One woman went on a hunger strike outside the agency in February to protest for residents who have gone months without receiving benefits.
Amber Shultz, whom the Senate unanimously confirmed as labor secretary last week, said the labor department's work to stabilize the ailing unemployment system over the past year will help accelerate modernization once the state selects a proposal.
"The RFP process is the next major step in our effort to modernize," Shultz said in a statement. "We plan to expedite this process as much as possible, while taking care to engage the business community, workers, and legislators."
Once the state chooses a proposal, labor department staff will work with the company on a project plan. Modernization could begin by the end of the year.
To apply for unemployment benefits, visit to www.GetKansasBenefits.gov.
Contributing: Katie Bernard of The Wichita Eagle and The Kansas City Star statehouse bureau
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