Arkansas Legislative Council (ALC)

Representative wing I'm all recognize you for point of personal privilege. Thank you Mr chair yeah we got a lot of strife one of the. Contention and angst in the world today and so we look for things that can bring us together bring some unity I think we can all figuratively join hands link arms. And wish a Happy Birthday to our house pro tem Representative Jon Eubanks I think that just might solve all of our problems here in Arkansas. Mister chair with your permission if we can light up all the mikes I think you need the song we're ready there we go Happy Birthday to you. Happy Birthday to you. Happy Birthday to you John. Happy Birthday to. Thank. Thank you Mr chair thank you Representative wing. The the store did run out of candles senator rice is is right members of you would when you when you leave today or you go out back there is refreshments in room commit conference room A and B. for Representative Eubanks birthday. So with that I recognize culture Bledsoe for the executive committee report. Thank you Mr chair the executive subcommittee met this morning and reconsider the decal Tory orders emergency rule by the Arkansas insurance department the emergency rule was reviewed and approved I move adoption of this report. That's proper motion to hear second. I have a second any discussion on the motion seeing none all those in favor say aye. All opposed seven. So with that we'll move on to item D. which is Dr Childress and secretary Preston. House the secretary Preston's on this soon. We get Dr Childress to the table. I think you see in. If you guys would introduce yourself for the committee and then I'll recognize you all to give us a brief. Summary of what led up to the events of last Friday. Right. I'm Brian Hicks the chief financial officer for for services. Sure is children's director the division of work for services DV Pearson deputy director internal operations for the division of workforce services. Good morning. Senator Bledsoe Representative Wardlaw thank you so much for the opportunity to be here today and give you an overview of the request of the cares act committee that occurred last week and then also to give you some information concerning the the taxable wage base and also the stabilization tax for unemployment insurance. last week on Friday of last week of the a proposal was presented to the cares that committee four hundred and sixty five million dollars in order to go into the the unemployment insurance trust fund and to have a balance in that fund that would allow us to keep of our Percentage to two percent and keep it from racing to three percent. during that discussion there was of an initially we thought we needed hundred and sixty after additional calculations we realized we needed a hundred and sixty five million. there was discussion in the committee as to the the request and the the timing of that request which require the cares active committee to gather and have a a discussion about that request and a vote what at what seem to be rushed and it the last minute. However I will say that we started this discussion with the memo and additional discussions in committee meetings including this committee and also several times in the public health committee regarding the balance in the unemployment trust fund today we can talk to you about those triggers and what the balance has to be in order to keep to keep our right at the point two percent of them we are prepared to do that today but I thought it was important to go back and talk about of the time line and what things what happened in between at the beginning of from the beginning of the pandemic pandemic up to last Friday so in June on June the I believe it was June the eight I was the first time that we brought this information to the attention of secretary Preston and to the secretary of or the chairman of the Kerr sat committee Elizabeth Smith. In doing so it was a discussion to talk about what what amount of money we thought we needed at that time which at that time our request was three hundred and fifty million that's because it was based on a balance that we had currently it was also based on the information that we had going from from that point based on the number of claims that were being filed back in. Of back in. April and may of course we had record number of claims with the week ending April fourth Which was our largest week of initial claims and continued claims starting with an initial claims for one week of sixty two thousand and then which was Very detrimental to our trust fund all at one time with previous claims weakening three fourteen of thirteen eighty two so you can see why we were concerned at that point however going into two June we realize that the balance was decreasing and it was important for us to to look at what we needed to do to ensure that our trust fund was solvent we did see a deer and that some of that was encouraging in June but it then it went back up and in July so monitoring that on a daily basis monitoring our trust fund account on a daily basis we were continuing to to watch those numbers in our trust fund and looking at what we might need from the cares that committee and we wanted to be responsible we were hopeful that we wouldn't even need to ask for money from the cares that committee and that is that is something that we are watching up until last Wednesday that the morning of Wednesday was that September the twenty skews me that September the twenty. Third I believe. September twenty third thank you that morning I sent the information to the secretary pressed and of course that was not in time for him to get that on the agenda I with ample time for the public to review that item and so that it he had that information but it was But it was not a possible to put that on the agenda for Wednesday and so that's why special meeting was called up for Friday and the request was a hundred and sixty five million. Pre cover nineteen they continued strengthening of the Arkansas labor market. Was occurring I we were saying increases in our unemployment trust fund until the pandemic for weeks ending April six twenty nineteen three week ending March twenty eight as I said before we had a very low claims are initial claims or hundred twenty eight thousand approximately for the entire year we continued claims almost six hundred thousand for the entire year. As we looked at as well as we look at what has happened this year and twenty six weeks half of the year we are already at three hundred fifty thousand in initial claims that's almost three times the entire amount of time from last year and two million one hundred eighty five continue claims almost four times the entire amount for last year. The Arkansas unemployment insurance program has served as a safety net for our art Arkansas families it especially was something that was utilized in the recession in two thousand nine. Unfortunately the increase in demand for our unemployment claims quickly exhausted the programs trust fund in Arkansas was one of thirty five states that had to take advances from the federal government in order to meet the funding needs resulting from additional you I claims much like we're experiencing now however the recession numbers were nowhere near what we've seen during the pandemic. The trust fund received three hundred sixty two million in twenty ten and forward in title seven advances in order to pay you out benefits so we had to borrow from the feds in order to pay out our benefits like all states the co wood related unemployment insurance costs have greatly reduced our trust fund balances and some states have already requested title seven advances. During the twenty nineteen Arkansas legislative session the tax burden on employers with ease their legislation to create a flexible taxable wage base. Senate bill two ninety eight which is now ACT five twelve twenty nineteen was designed to slow the growth of the U. I trust fund easing the tax burden on Arkansas's employers by providing for the automatic adjustment of the taxable wage base based on economic factors directly affecting the you I trust fund so beginning January one of twenty twenty the taxable wage base has the potential to increase or decrease between seven thousand and ten thousand every calendar year based on the average insured unemployment rate for the most recently completed state fiscal year. At five twelve of twenty nineteen also contained special triggers that could result in the taxable wage base being set at eleven thousand or twelve thousand depending on expenditures from the U. I trust fund and the U. R. trust fund balance as of June thirty twenty nineteen these special triggers will supersede the regular factors used to determine the taxable wage base for the following calendar year. Based on the average insured unemployment rate for fiscal year a federal fiscal year twenty twenty the taxable wage base for calendar year twenty twenty one way increased to ten thousand. Increase can be attributed to the rising claims during the first and second quarters of twenty twenty. Due to the legislative updates and to the Arkansas taxable wage base stabilization work rates paired with the severe increases to benefits data covered employment under a covered employment layoffs. What can which continue to create create an anticipated changes in the volume of claims and the cares act legislation giving states credit for waiting rate weeks and other provisions and the continued reimbursable credit it is difficult for us to predict the trust fund balance. Except using the balance on a day to day looking at the ends into the ballots and outs from the ballots. One document that I sent you is how you can check the unemployment trust fund balance for Arkansas and FOR other states on a daily basis. That will show you all of the the amounts that we received into the trust fund for reimbursed reimbursable amounts as I mentioned and then also the disbursements out of that fund those disbursements are made on a daily basis and the receipts of funds received on a daily basis obviously making that trust fund. I have many ups and downs based on the disbursements for that day in that week the trust fund balances in the fiscal year our federal fiscal year twenty twenty September thirty is six hundred and seventy four million one hundred and fifty eight thousand three hundred nine dollars using the tools created by this body and twenty nineteen we are in a much better position than we word during and after the recession and we are levy aiding the long term employer costs that we have experienced in the past we are here to answer any of your questions to provide more information and also to explain any further details that are needed for the taxable wage base and also the stabilization right. Share time thank you. Surgery Preston you have anything you want to add before we go to members. Thank you Mr. You and I appreciate the committee's indulgence to having to have participate in this meeting zero our state so thank you for. That and thank you for the review and just wanted to kind of real time man of to fruition is is doctor Jones mention this was discussed it with the killer steering committee back in June in the mental updates red wings of the killers during the trust fund balance I see a release you reckon there we first made in this presentation to shares it was about three hundred fifty million back was that we needed to stabilize the trust fund at the time and based on A projections and on and so To the September. That number was able to come down significantly down to the one sixty five and yeah so respective done several a week or two in advance but just. Two it to do and that that Wednesday when I got that information This is asking for the institute chairs and then there's some confusion between. The appropriation that was necessary given that we have this ability within the trust funds as captive billion dollars with the earliest and within that that there was then the discussion about it. Creation necessary to move funds from Taylor's into the trust fund suggests that took place on Thursday and that's what led to the founding meeting in that question needs for the executive committee of a aussi to approve that appropriations so so and the team collectively as we talked about it since then we could have done in a week or two in advance More time to discuss it but we got to that point where we need to make a decision and one sixty five was about as well as we are costly and be able to get that and insert using the killers funds to get the stabilization up to where it needed to be in the trust fund so and the need for the cares meeting up. in the emergency approval by a all C. so thank you to to the members of a I'll see for or coming together and supporting this supporting business is an Arkansas this hands to keep their race at the same level format stabilization because we're able to do that is no fault of their own as they seem mistaken unemployment suits to cope in nineteen but I thank you for children's ninety one vying for being there to help system answer any additional questions you might have thank you Mr chairman. Thank you I've got a couple questions for Dr Childress before we get started. So. All summer we've heard about all the fraudulent claims can you tell us about how many of those fraudulent claims we've had. It's ME. House I'm sorry I represent Wardlaw I thought that was senator bond speaking A can you can I tell you about the fraudulent claims yes can you tell us about how many we've had. I don't have that number with me I can tell you how many we have N. P. rye just because I ran that report this morning so on the pandemic unemployment assistance we have under fraud review fifty two thousand three hundred and seventy one under regular unemployment insurance I do not have that number with me I can provide that to you at a later time but it's significant so with those numbers and that's significant you just referred to what are we doing to reclaim those dollars and how are we going about that at the moment okay I'll give you a general overview and then I'll ask Davy Pearson deputy director of internal operations to speak to that she's work more closely with that unit We have a unit imply Senate added staff to that unit also we've engaged of the federal and state authorities in working with us one we have suspected fraud and it but in it is obviously a ring rather than just a one one off Klein we also have did apply for and received grants from the US department of labor to assist us in fraud detection and so recently we were approved of to spend that grant by giving the appropriation and then also the positions that are allowed under that grant so that will increase our capacity in our fraud unit we took our internal unit and expanded it beyond its existing Structure so that we could have a specific fraud unit that was That was focus specifically on then. Number of fraud cases that we have right now which is which is unprecedented it's we've never seen anything like this all states are are saying this we share data with the with the unemployment integrity have which is the of national organization and group that is assisting us in identifying those claims Senate those potential fraud cases in rings sending that information to us and we're also sharing our information with them because of all the states submit all the all of the information that they haven't suspected fraud it helps them list to assist in identify of the large cases of fraud that are being conducted by groups I Stevie tick to provide more information if if needed. Thank you thank you Representative Wardlaw we have as doctor chillers said we've established an entire fraud unit we've funded through federal grants that are available for that purpose we put some very qualified people in that unit and we are still continuing to hire and staff up and train those people were were involved in our national peer organization they also have a very strong team very qualified people who are of focusing on this and helping each state including Arkansas as certain questions to ask certain things to look for certain matches to run against the data it we just continue to per improved day by day as we figure out what's going on what types of schemes are being committed you know sometimes fraud can just be one person claiming the wrong wages and sometimes it can be an international crime ring so we have to deal with fraud and all of those levels and be able to identify that this the schemes that they may be using in addition to that well. Our fraud rate previously was kept low compared to other states because we among very few other states required new claimants to come in and show ID they could file their claim online but then at some point during the process before they could start receiving payments they would have to come into an office in person and show their ID their driver's license or so forth with the pandemic of course we had to suspend that in person visit and requirements so that was one of our primary Primary tools to make sure that the person who said they were that person and that really was that person. we are in the process of re instituting that of course we've had to consider all the safety precautions for our staff as well as for the claimant's as they come in and set up some new procedures and so forth and and help everyone feel comfortable with what was going on but that also is one of the ways that we've we realize we just have to to require people to come in and show their ID so with all that how much it we collected back or have we collected any back from any of these fraudulent claims at this point well you guys are went around the bush less less actually talk about it have we actually got any back and have we actually went after any individuals. Senator Wardlaw and it Representative Wardlaw the low man on to this. that we have not pursued any action on these individuals as of yet because that's up to the the authorities so it's being reported to the authorities they are looking at all of the details this includes the F. B. I. and the state police so that I may take what we provide to them and they will be the ones that will pursue any action on those individuals once we've identified that it was intentional fraud within the agency we have fraud and non fraud we have some individuals that have applied for unemployment and have received benefits but it was at it was due to they were paid a payment should have been paid a payment we have individuals right now that have received of payments and and return those to us so as far as collecting those payments back A we are doing that regularly and communicating with those individuals if a fraudulent if someone files a claim and it's fraudulent then what most most likely what happens is they used the address of the of the actual person but there of course using the name and the address of that actual person and the paper work goes to that person the person who filed the claim is not going to put their address on their most likely all they want to do is make sure that the funds are directed to their bank account or to an address that has for a debit card so you can see how all this process which involves the person who it was filed on submitting that to our agencies so that we know that that wasn't a claim that is real that is that needs to be paid and then we have to follow up trying to backtrack and look at what bank account the. I use who that bank account may belong to looking at routing numbers communicating with banks in other words it's a long process so I wasn't prepared to talk today about fraud I'll be glad to come back at another time and give you more details in the exact numbers and where we are and what the status is of that those investigations but I don't have that information as far as the numbers on and bring that with me so I just wanna make one thing clear we're talking about putting a hundred sixty five million we did it Friday into an account that has been attacked majorly we know that our own governor got filed on we we know we have some members of the legislature has been filed on so yes we should have been ready to talk about from today because that is part of this gap that were for feeling but with that all all go to members senator Hendren you're recognized for a question. Thank you Mr chairman of. This is a a frustrating time for I think many of us and I want to kind of go through some reasons why because I think there's some background that the members need to know I ask the chairman Bledsoe to to call this meeting this weekend. And what really precipitated that is a couple things and I just wanna tell you again I want to give a little background and I got a couple questions but when I read the story Saturday about the report from the steering committee secretary Preston. The comments that you made all apologize if this request is roast Preston said be added to the thought more people were aware of the need for shoring up the state's unemployment trust fund as the first brought this to the committee's attention engine. That upset me more than a little bit and and let me tell you why as I give you some of the background here I I've I've seen. Two democratic ministrations two Republican administrations this is the biggest screw up I think I've ever seen and that's why I asked we come down here. And and get some answers because let me tell you. Senator Ingram and senator DISMANG and and I know back received Carter when he was Speaker work hard to get the unemployment insurance trust fund to a place where it was solvent. we talk about dropping to six hundred and seventy million when we came down here in the back it had a debt of about three or four hundred million to the federal government that's that's the world we were living and then. So we increased taxes we decrease benefits we did all we could do to get that fund to the place where would be softened. And then as we began this discussion about cares act funds and whether or not we were gonna shore that up because it had it had begun to drop from eight or nine hundred million down towards a six or seven hundred million dollar range. There was never any discussion about. Or we're gonna have an automatic tax increase with seventy two hours notice and why do I say that let me there was discussion that you have we have money left after we've taken care of PP and this things we need to do is schools and the things we need to with businesses that are struggling of week after we've done those things if we have the ability to to put funds in that to account to where that we don't have to raise the taxes will look at that and I think that was really the feeling of most of the people in the legislature is we knew there was a dimension trust fund account but when you've been down to three or four hundred million dollars in the negative I got to tell you that is six hundred seventy million dollar fund balance doesn't seem like something we should fall fall apartment and and that's what we've done here and why do I say that let me let me give you the time line for how this we got to the point where we put these two chairman in an awful position because of a failure to figure out what was going on with this trust fund they were in a position where they had to decide whether they were going to sign a hundred and sixty five million dollar appropriation probably the biggest one that's ever been asked to be signed under emergency rules. Work make taxes go up by thirty percent and when I was given that information said would do not even have time to convene a L. C. for an emergency meeting no because it is not in the account by Monday afternoon we just found this out the taxes automatically go up. So I get a call Thursday afternoon from the administration giving me those facts that we have to get some emergency approval to prevent this automatic tax increase from going up and we don't even have time for an emergency a LC meeting. I was not very excited about that because I knew the position that it put our to chairman in. Now I know there's a lot of support for you doing thanks to prevent businesses that are struggling from having a tax increase but again to say that what you're surprised that we were you know didn't anticipate this coming. Is complete misunderstanding of the the environment that we find ourselves in. so I guess what I would ask you secretary press them because I believe the Buck stops with you. How do we know. That we're not going to have this happen again how do we know that the the I'm not gonna get another call of the chairman of a Elsie's not gonna get another call saying I need a hundred sixty five million dollars in three days or or or taxes are automatically go up. What how did that happen and how do we know it's not going to happen again because again to me that's the kind of surprised that is inexcusable it is just not acceptable that you put legislators in a position where they don't have time to convene before using a hundred sixty five million dollar appropriation so I want to know what you've done about it and how we know stuff like this and going to happen in the future. Thank you so that. I guess that. We should have committed in this this this is a man and a committee two weeks before Jennifer Taylor is to review and make the request of the legislatures so you to have a chance to be being is. See to discuss this unfortunately we got to that point when we were in that the information as Dr Childress said. And men's day last week I went to the same deck chairs are meetings so as to write to get on to that agenda it in. No. Can. They shouldn't be surprised to serve as a surprise when you get asked to approve a hundred sixty five million dollar rent I was referring to and soon the surprises that this issue was was out there and Stockard children's alluded to she's testified. This over the last so the trust fund stands I I do think a lot of that to this to the stage of going to the you and I the understanding is that you mentioned members of the house of it and then the last several years to get the trust fund to a point where that is I was fortunate in one band what happened in. Session in Arkansas had. And. Given the legislation that you all put us in position that two. Be able to serve the transponder have to raise taxes on our businesses and utilize the response. This question this won't happen again the September thirtieth was with the the was the the test a foreign so transferring those fines and having that the trust from the band that parents. Is to be a member of the top of my head but about seven fifty million dollars that keeps us at the rate higher year of the next tasty won't come until September thirtieth twenty twenty one okay can I just interrupt you for a second to at follow up on that so you you know next year this September thirtieth we're going to have this same assessment done by the federal government to determine if the tax rates go up so I would assume we knew this one was coming. He didn't wait I mean why do we know back in June or July that if my September thirtieth we were going to have to have funds transferred or the rates are going to go out and and why did we discuss that it the last two three months meetings. Referred to the the member who cares committee in June and I spoke to in the presentation and and the gin cares commitment yes that that was the the date the rule also right now the testing on. Thank you June thirtieth but we have the threshold for that so we talked about that amend that September thirtieth daily. The staff for children's lives you she is. Intelligence to. The legislature so that the information was there. Was read says that we should then this September instead of waiting till late September but. The reason that act that came out was at that time was three hundred fifty. But those down new collections and members trending. Employment we're able to get that number down to the hundred sixty five million remains back and shoulders instead. We can lands that it was a hundred sixty million with additional calculations is they're continuing to move in and that being the finding a hundred sixty five billion star alright this let me just again this cuts both ways if you're saying that you begin to mention this in June then why did you not bring the hundred sixty five million dollar request before the full ale see in June or July or August. Is amended three hundred fifty million dollars. I mean are we that far off in our estimations of the burn rate a hundred percent off. From June to September deferred to the folks that a table actually calculating comes in those numbers to give you more details about. I guess you know maybe the cares committee got more in details than than a LC or some of the other committees that I can tell you again as as the pro tem I had no idea that we were looking at a September thirty deadline for an automatic tax increase like that I don't know if I'm in the dark and should have known that I didn't see in the paper I don't think many members of mentioned it to me I knew that again so I I just feel like that was completely left out of the equation with the guards we are burning through all this cares money. Senator Hendren and secretary pressed and I'll be glad to add of. To the comments made by secretary prestin if that's acceptable. Okay so as we've provided to use the statute that that actually was created by this legislature eleven ten seven of six has provided however for the purposes of this section the computation date is defined as September thirty of the calendar year preceding the tax year. so the information was out there. We could have done a better job of making sure that that date was out there and bold and that that was the date that we were looking at but I will tell you and let me let me correct the statement I made earlier on the ballots six hundred seventy four million was prior to the one hundred and sixty five million dollar infusion so if you just added that on that date we would have had eight hundred and thirty nine million eight hundred fifty eight thousand and the fun as of today or when I ran my report yesterday we had seven hundred ninety five million five hundred sixty seven thousand two hundred twenty seven you can see the volatility in the up and down just from just from taking the date that we infuse the hundred sixty five million adding that to the balances of that day and then what our balance was when I ran my report yesterday and what is available on the at the link that I provided to you so as far as as that date the September thirty date yes we we could have and should have made that more obvious that that was the date that we were calculating if we when we came to you and previous legislative committee meetings and in other meetings and then over and in a couple of dozen responses to legislate tours through the bureau or directly to those legislate towards that asked us questions about the fund balances it was always made clear that these fund balances change rapidly in February one to the end of February there was only a change about eight hundred thousand dollars in our trust fund however going into April from April one to April of. Thirty if there was a fifty million dollar change in our trust fund and that's with. Income our money coming in and money going out and in may there was a thirty five million difference in the fund balance from a one to may thirty one so we were watching this every single day and as we saw the the increase in a little bit of an up tick in the a slight decrease within an up tick in the balance in the unemployment claims that spurred us to initiate the three hundred fifty million dollar request. so that was discussed that number was out there we as secretary pressed instead we discuss that numerous times in meetings Anna course among ourselves and sometimes because we know all the information and because we're talking about and living it every single day sometimes you forget that there are those out there that that aren't living that every single day and we should have made that more clear I take on the burden in the responsibility of reporting that to secretary Preston and I reported that team on Wednesday which was not in time for them to get that to the cares that committee and give the cares that committee time to to to to the due diligence on Wednesday like secretary Preston said at that time we knew that we needed anyway somewhere in the range of a hundred and sixty million we were still doing the calculations because every day the trust fund balance changes and it's substantial unlike in the past because the number of claims are just art are unpredictable we don't know when a big company or a restaurant chain or a large manufacturing plant is going to lay off a lot of employees and of course that doesn't come to us till after they've applied and it's almost within days because we do not have the waiting week right now so that is that does not give us much time to look at the numbers and to speculate in a time where we've none of us have ever experienced this type of of increase in in unemployment and these numbers matter of fact during the recession our highest unemployment rate was eight point five percent and what we've seen now as you as you well know it was well above eleven percent had my numbers here well about the let a ten point eight percent in April of this year. So we're watching this regularly fortunately the the unemployment rate is dropping and we're seeing people go back to work but it still has an impact on our unemployment trust fund and we will continue to monitor that so that next year in June and twenty twenty one we will be able to give you an estimate but it's will not can guarantee you will not be the same number when we come into the middle first remit of set middle of September of twenty twenty one unless everyone gets back to work and we're back to our unemployment rates of three point five percent that we were at prior to the recession. I appreciate you allowing me to provide that additional information. So so with that said following up to senator Hendren. If you came to council would just two weeks before the end of September and more than likely will be within seven to ten days next year just depending on the month falls. Why could you have not of asked for an appropriation for two hundred million that would a covered. Your estimate and then the legislature would have been informed that that was common. And we would I gave you the appropriation which is not the funded amount is an appropriation so you're able to spend up to that amount and you can a came back to us in October and said we spent a hundred sixty five million were returning the rest of this appropriation back to the cares that committee there there's so many scenarios here that would have worked all up better than a Thursday afternoon. And then we had to request where the law was they're not we had that information Friday morning we're over send a letter out to our members by noon Friday by the time we collected all the information and then sign it by five you could have made our life a whole lot easier by grabbing an appropriation any excess and then moving through this process by informing this committee does that make sense yes Sir. Senator garner you're recognized for a question. Thank you Mr chairman sometimes and this job you get a serendipitous situation come up so Wednesday when the carriers at committee released their four hours you'll Tuesday when it's there don't have that we as a meeting at four PM I called secretary Smith I was upset because I had requested money for veterans suicide program and was not putting on the agenda this was the second meeting since that request the going out I know prior members like Senator internet requested funding was her next meeting during that phone call secretary Smith who is the chairwoman of the cure's actor committee told me point blank that we could put you on the agenda Senator garner but you went and got opinion money. I say well why is that she said we have set aside two hundred fifty million dollars that could not be touched until October first deadline. And I pushed back on I said no ma'am I said if the executive branch wanted that money you get access tomorrow and she seemed offended that I would bring that up. So the most surprise the very next day after that we as a meeting I see that you all can request a hundred and sixty five million of that money that I was specifically told by the chairman could not be access until the October first deadline no matter. There's two possibilities from that conversation ahead. Either a chairman Smith bald faced lie to a sitting state senator about money could be access or be she had no idea that the next day she would be have to request a hundred and sixty five million dollars which tells me one or two things happen with. Your head in for be anybody because you didn't know what was coming and you didn't do your due diligence or be you wait to the last possible minute to put this on the agenda to put a gun to our head we either approved or not so the meat either way this either incompetence or intentional but leases legislative body in those chair people in a bad position I thought that conversation was telling for this committee to know thank you Mr chairman. All right to a senator Ingram you're recognized. I couldn't agree with senator Hendren more in his remarks of. Looking back to the with the unemployment trust fund we were in a negative to almost three hundred million dollars heck I remember when senator Teague one pay the whole thing off because city did one anybody any money but we work through that and you know what we work through that without care sex money we work through it back cut in benefits which I might add we've never restored. But we worked through it. What. With the trust fund and some of us like senator DISMANG and Hickey and Hendren which or watch that thing it I think this year the high water mark is been about eight hundred fifty million dollars I think that was maybe in February or March before this thing here that was about a hundred and fifty million dollars past we've ever had the trust fund of and then I think we had that run in April and may and I think and you can correct me but maybe three hundred and sixty five million or four hundred million the trust fund it failed to that level I know that looking at the barn rate in April the trust fund was going to be out of money in October. But it rebounded the economy rebounded people went back to work in by their own admission here up from June until this date of we have half the money it it will request is not needed in it very well could be with the economy rebounded that we're not gonna need a hundred sixty five million of cares ACT money. I always saw that the cares that money could be a safety net for the unemployment true trust fund we're if this date is held to by December thirtieth it yes we would have the ability to dump that money into to enhance that fun. But the idea of not getting any input from the legislature is Senator garner just say and you know there's some ideas I think we can be more flexible with cares money to do things like Senator bond is proposed money for teachers in senator garner for us suicide treatment for veterans I mean there are things that we can do with the cares ACT money that we can't do with the unemployment trust money but we have flexibility we can if if it got so all we would have the opportunity to borrow money for up to nine months interest free which we have done from the federal government or at a lower interest rate. This number yeah this number moves every day but how do we know that this number is not going to move back to a positive at the end of the day I and the hundred sixty five million was not needed we don't don't know that. We do know we have expended a hundred sixty five million dollars it could maybe gone to broadband that could have affected this state for ten years from now we we do know that but that's a debate about how to spend money that we never got to take place and I do I'd like Senator Hendren these chairs to be put in the position that they were in. And in especially saying that you've known since June the as I watched the trust fund I I I didn't know that. You know if we to miss this pavement and it would have gone up minimally on our employers you know what we're gonna be here in January we could fix that retroactively and we would know what we're looking at we would know the impact of the trust fund. And we would know about what we could have spent this cares ACT money for so I guess in close and I will say excluding this body is I I think narrowing the field all options that we could have I think that we have of reacted much too quickly. I think we had a lot of we have a lot of bullets left that we could be used to address inequities or the young unemployment trust fund at the expense of this cares money that we could use wall term to make differences in this state. Thank you madam chair. Thank you of. Preston do you have a comment to anything you've heard so far. This time the manager all right thank you. A. Childress do you have a comment Sir for. I appreciate the the feedback I appreciate the fact that that that we were given the opportunity to come here today and visit with you I do understand your frustration and your concerns as as we have stated this was not done intentionally it was not done last minute it was not done intentionally at the last minute to catch you off guard that is not how I operate so I I do want to say that this was something that was done because it was constantly changing and it became very obvious and clear that we were not going to have the trust fund balance at the rate that the place that it needed to be to keep the stabilization right it point to. There was a decision made to approve that cares act funding which kept it point to but if it hadn't that decision and not been made to keep it at that rate it would have gone to point three so not up the the thirty percent that was stated earlier but up from point to two point three nineteen ninety. A. Representative Sullivan you're next. Thank you madam chair I think it's very necessary for us to look back at the problem but to to look for a solution to where we're going it sounds like getting people back to work is critical in this I see we have a. There is a group a committee called the governor's dislocated workers task force rapid response program are you familiar with that so you know I've got some data on the businesses that are closing and how quickly they're closing and not re opening all that's there the first of all the all collect data on the businesses that are closing. I'll STV Pearson to respond to that. We do help the businesses who are closing as much as possible that is a program that's run through our agency well I'm just asking you are you tracking that do you have data that says we have businesses that are closing and so that we know what sectors need help do we do that and that this I'm just asking a simple question yeah yes Sir of businesses report to us when they expect of late A lay off for a closure that information is reported to our agency but it's not a public information okay and so it seems like we have businesses and state surrounding us states opening up businesses and it seems like that if we were to open up. For businesses and allow more business activity to happen we would the the trust fund wouldn't be in as much danger as it is for that be accurate have business increases employment increases and therefore the trust fund is replenished more quickly would that be accurate. Is I would yes Sir simply just using the that that What it is it would increase yes so are but there are a lot of factors that have to go into that I understand but it's it's pretty simple equation. The so are we working at commerce. To open our businesses back up to increase employment so that we don't have those risk and yeah that's my biggest concern is we we talk about rescuing businesses but we don't are offering opportunities for businesses to rescue themselves what seems like the long the best problem the best solution to this yeah I just I would hope that we talk about informing people and every you speak every day but now once a week we get a formal report from the governor's office about the health of our state but we don't hear about what the economic health of our state is and I would hope that we would start in the governor's press conferences are these reports that we would start having some of these numbers published on the number of businesses that are closing and the real impact on our on our state secretary pressed in which you responded the need for you to make public statements to the to our state on our economic positions just like this. Thank you. The question and certainly as we get more business is back open to what we want to report and the members of of people working in I think we we are putting that information when you put it on one frequently obviously the the unemployment rates are okay. The basis of what's its news each month one twenty three adjusted but we certainly said either from the show that. Fashion we we certainly cannot just ask the question I'm asking would you start reporting the number of businesses that are closing because it man this is just a partial list and there are I don't think the public is aware of what businesses are closed and they don't see this list and so we report on the fiscal health or the physical health of our population but we don't report on the economic health and all others in this mist madam chair Mr chair yeah I really think we need to start learning more about the economic health and I would encourage we right now the. Public is scared to death to go to a business you can't touch the flag stick on a golf course but you can open every door and every business in here and some of these things that were putting out there scare people to death and we are not going to recover economically until we start sharing more information with the people on what's going on not sure hope will start loosening up some of these restrictions and allowing people to go back in Arkansas video where we have armed agents are going into businesses ask telling the people that they are here on behalf of the governor to make sure they're wearing their mask and social distancing properly that scares people to death to go out and go to bed to our businesses and we cannot recover economically and do we back off of some of the strict rags and allow businesses to do what they ARE one end of business to do I hope will address that. Thank you madam chair. Thank you Representative. Senator DISMANG recognize. Thank you Mr chairman had just it just a couple things and I don't want to continue to beat this but it's all about communication I mean I think there's probably spillover frustration for have the ready for business programs handled by ADC and some other issues and I think your that that's playing a part in and the response that you're receiving from the members today any in regards to an employment trust fund I mean we we need to have a better grasp of what to expect the next year as far as rate increases you know I'd submitted and and made some request it's been a while now but it took awhile to get the responses the responses were very. I don't know how to say it was such shallow in in you know kind of the the dive that they did in in looking at my by issues of it I'm scared to death and I'm worried about these businesses that have been forced to close having rate increases because they were forced to shatter the doors and lose employees and try to get them back and I think that's something we need to work on and something that we can work through I hope. What. This is my concern so your business is there still closing mainly those are in the service sector you know those that were impacted by some FOR shutdowns and I don't think we're going to see the end of that the the federal relief is you know pretty well ran out for most of those businesses in a lot of them are still struggling and so I think you're going to have more closures in some you know specific industries at Hamid how do we respond acts of this rapid response team and all this and number one I don't know anything about it didn't really notice it existed but what is the threshold for when a company is closing and they're going to close public knows are going to close I mean are you able to do you what is the threat did any ten employees fifteen employees thirty employs a hundred you know for that to them to be engaged. Senator DISMANG so I'll just speak generally about the rapid response well be glad to send you more information when we receive a notice from an employer what we do is deploy E. at we first contacted that employer we asked them if they're interested in and our systems and we go out and deploy a mobile units to that site so that we can assist those employees that are going to be displaced and some at some Senate some point it could be temporary but but also for those that are permanently displaced so that we can help them with preparing to look for a another job how many employees do they need to have before I mean so that the it's worthwhile for the department's in people out I don't know that there's an exact number Brian you number for the rapper response team that federal recruitment that number is fifty for the employer of what we also have the work force boards in the workforce investment opportunity funding that will also provide services to just the. One individual that may have the so impact okay because it meant. Our our do we have enough staff right now to handle what's happening as far as claims have enough staff that's in the admin level to be you know reviewing the fund balance formulating plans for you know potential legislation next session are we are we staff to the level we need to be. Senator DISMANG is you know we have added staff as as we have realize the need of got coming to the committee with our grant request that included grants that we've received included positions and also going to the personnel committee to request pool positions when we were not able to fill those positions with the current positions that we have within our agency can I say that we have enough people they're probably and not and not enough people that are able bodied and and and I educated enough to do this work that it and be and have the knowledge of unemployment insurance in the entire state of Arkansas and it we've reached out is to all four corners in addressing needs FOR unemployment someone and within a with unemployment experience and obviously most of the time that someone who's retired and and we bring them back when it's allowed because it is a it is a complicated system it's something that that you don't know learn overnight and usually it takes a couple of years for someone to be able to have the knowledge to work directly in the the the system that set up for unemployment insurance benefactor worse So can could we use more people our way but then that we have limited availability to train those individuals as rapidly as they need to be trained and then the knowledge base is is also an issue as well currently I we have or can continuing to fill positions that were granted by this body and the personnel committee and so we are feeling those positions daily and working to feel positions that are vacated by those individuals that that have been working for the agency so there's we probably don't have enough but based on the current staff that we have to train those individuals in a manage them yes we're in a we're in a good position right now however back in in April when we were at may our March when we were at our lowest level of staffing ever you know it took us awhile to ramp up and to get to the position that we are today and it wasn't fast enough but that wasn't because of of not trying in and not having the positions it was just because of the time that it takes so here's here's what I would so. Your back during the initial wave of you know closures people getting laid off I had an individual text me could never get through hours on the phone you know I don't I don't know what to do can you help you know we made some phone calls is able to get assistance yesterday same situation of the round of layoffs for closures the same that the individual spent hours upon hours upon hours on the phone never got through transferred multiple times here's here's what I think may need to happen is in a maybe I'd like to do it is sent down from these people that are filing because I I don't think there's a disconnect between what's happening. And. Now what we think may be happening with that I mean I don't think that you all at this point thank the people waiting hours on the phone and getting transferred multiple times but it's still happening and so there may be some break down in the process or. I thank you and I don't know what's happening but I feel like we need to figure it out because people really losing confidence in the one thing we don't want them to do is lose confidence in this unemployment trust fund or the initial unemployment you know program I mean that that's the safety net and if they don't feel safe and it's not really achieving what it needs to have so again if it's staffing understaffed whatever I think we need to know about it and start repairing one thing that scares me to death that we just talked about earlier brought up and I know that's not exactly why we're here but things related this whole thing we're going to have to come in person Allen show ID. I mean that's just one more long Stephanie so if someone said on the phone for hours. They feel that you have done whatever on the internet for hours whatever they need to do in the in the final step is to come in person. Into an environment with multiple people it just seems a little bit. Counter productive to what we're trying to do there's got to be a different way than someone physically showing up with an ID to verify that they are who they say they are a bit big and I mean I just hope we can maybe look at some other possibilities for doing that because number one that that's a whole nother group of staff that's going to have to be in place not answering phone calls just to check out these or do whatever in at the end of the day people are probably not going to try to fill out or go online there's come in person and then you're gonna have a a lot of people that were trying not to have show up to file for unemployment I get I just a I would like to work through process and maybe just take one of these phone calls that we have and sit with one of your administrative people in and just see what's going wrong. Thank you. Thank you senator Representative Dotson you're recognized for a question. Thank you Mr chair You know I've been sitting here listening to this discussion I agree with a lot of the frustration and many legislators of expressed this this process I don't think it's something surprising or new that's popped up we've been talking a lot about unemployment over the last six months I think it's probably one of the the number one things constituent wise that I've dealt with over the last six months I I appreciate Dr shoulders your your rapid responsiveness to any request or issues to try to to work through that system You know it's he. No one was prepared for what. What we faced or what what you faced and and you guys have been working on that and I'm sure hindsight being twenty twenty there's a lot of things that you would have liked to have known now. Back then that you do know now that you would have done better had you have that that for knowledge the one thing that it is kind of frustrating in this whole process is that. We have a limited amount of Kerr's act funds and unemployment trust fund reduction will burn right whatever that happens to be is is clearly anticipated that we are going to be facing something like this I knew having. Having studied a little bit of it that there was going to be automatic tax increase if we drop bill blow through certain threshold but I don't know what that threshold was until this meeting here this morning I had heard the three hundred fifty million dollar number a few months ago and was kind of frustrated that we weren't planning or or setting stuff aside for that Prior to that happening but the the what I was told was that was going to be at the end of the year I guess I needed for the clarification at the end of the year meant the end of the federal. budgeting year September thirtieth not December thirtieth like I was thinking it was so I still thought we had some time to to look at that and I didn't realize is going to be a basically if. One of my math is right of fifty percent increase on our businesses I guess the two questions that I have is one. Next year September thirtieth we will be facing this again. Do we face that automatic fifty percent increase next year if it drops below seven hundred and fifty million or is that a a a different cheating scale what is a go up to eight hundred million next year is a drop down as a percentage of total employment in the state house that number factored and then ology answer that and. I have a final statement There are several factors that affect calculate into that rate based on the cover pay roll on coming so employees there are in Arkansas of you know that number does move Ole as well as the amount that's in the trust from those type of things so we won't know so the exact number the the threshold but we wouldn't know you know in a range of ahead of time what that will be of the challenge this year was trying to gauge what the trust fund balance with the you know the cover payroll we had that so soon after June thirty. so there are some factors that we knew but then there were some factors you know like to trust fund and those type of things that was hard to predict you know of so to how how would I go how long was it you know the sustained at what level and how for when would start drop in the claims are dropping how fast with the drop that was that was a challenge to to protect so I'll take that do we didn't know for sure exactly what the number was it's a moving number we won't know next year to anticipated further in advance then a few weeks is what you're saying. Thank you. Right so you once we have the cover payroll number which we usually have that by the end of of July so we will then know what the target numbers have to be for the trust fund to to trigger the strict to make those triggers of for those triggers for the issue of September thirty for the trust fund to FOR the sensation tax to be completely off would be nearly one point two billion of four to go down to point one percent would be just over nine hundred seventy million of that point to percent the trust fund balance the to be read at six on a similar sixty three million. So the point three of percent as last year was five point fifty four million to get the point four percent is three forty five so on up to three hundred million four point eight so those are the amounts for this year with those be the exact numbers for next year and know with the B. and someone that ballpark range yes Sir I thank you that that helps me understand exactly what we're looking for and when we need to know by the end of July so we'll know what the what this target levels we need to hit our the and then. This is this is more secretary Preston hopefully can hear me This is the frustration that many members of had as you you're not able to see the the the members we have present but there's probably at least thirty forty fifty legislators in the room at the moment that's a significant portion of the legislature that is present for something like that that's because this the Legislative Council meeting where it's the largest committee when we're not in session meeting across a broad spectrum of people it's not just a public health related or education related it everyone has has some some interest in this particular committee and in a tense Emergency actions are signed off on by four people the chairs of of the committee not. A legislative committee not a even a subcommittee of the Legislative Council and so this is This is the second time that I've seen the ready for business and now now this there may be a few more wear a emergency the action has been taken to to do a of significant sum of money request in a very short period of time without and FOR informing the legislature Four members the legislatures not informing a legislature and so I just want to hopefully make that abundantly clear to you in the future that At. Inform the legislature head of time not taking emergency action After the fact thank you. Thank you. And I appreciate that and and I do agree and and I. I understand your frustration thank you. Senator rice you're recognized for a question. Thank you so much my frustration has been address we'll go back over that I will ask Mister Hicks is it your job to sound the alarm for the looming September thirtieth date. Yes Sir I would agree with that did you sound that'll or yes Sir okay as as we have gone through transformation and and we we used to talk about a lot about silos and sometimes I think we just make a bigger silo. And it was already stated that some of the frustration coming out today and doctor overtop compare repeatedly thank you for the the job in response the that you do there were living in and frustrating times it and don't think that you're not appreciated and and ms Preston to but. The frustration been expressed as mine too is it the legislature real an afterthought. It will not be an afterthought we're the closest. One is to the people. That is being affected in when you take us out of the discussion. That's not right. The one thing we all of the unknown is the discussion. And we need to have time to do it in with a volatile amount going up and down steel by September first or September fifteenth. Somebody should have been flagging the legislature for discussion the thirsty the day before the last council meeting I. The last thing I said to our Senate caucus please don't forget this money that's been set aside for the unemployment trust fund. I didn't know what the date was but I knew it was coming sometime. And it had to be done in its that important and I support. But we should not be given this stuff ACT been said basically a gun to your head and you know approved that's not the way governments post work. So I I did not issue and admonish Mr pressed as I said before don't take us for granted. It is not what people that are out here pay in taxes will. And and I'm I'm very frustrated about that. Doctor elders you said you may come back in state let me just ask you the if you were you're welcome to put it off till later. Then again appreciate you get back with me the seven. Letters. From work for services that wound up and a constituents empty rent house. Why design work for service IT not have something better. Then that to me that is either one is amended terminate fraud to the is it looks like is susceptible to to be in that wise are system not better than sending it is to empty red house now I don't think they moved in there were three days seven different people probably have lived in that ran out or use and I agree this. How do we get our system up we can't be used by. Senator rice as far as the the letters that that went to that one address as I explained earlier that's when an individual files and then there are letters that are sent out to the individual and to the employer and if it is a regular unemployment claim I can't remember in the case of those letters that that was regular unemployment or it was pandemic and employment assistance I will say in the new pandemic employment assistance program we do have triggers we have ways to do to run algorithms we have ways to look at. Addresses some of you may have heard of us doing the authentication of dance around the state where we were checking ID's and that was triggered by the algorithms that we that we were able to run in the new P. U. a system that system has the capacity and the ability to do things that are system that is twenty plus years does not able to do and so we are aware of that we recognize the advantage of having this new system and for the P. U. a system we are hopeful that we can we can of the have funds to update our news are you I system much like our new P. U. a system so that we can do those kinds of things because the then we're able to stop those letters from going out doesn't mean a payment was made necessarily but it does mean a letter was sent out to notify that individual that unemployment had been filed and then if that was regular unemployment the employer also receives a letter that says that an unemployment claim has been filed so there are there are. Mechanisms in place and without the waiting week that we currently do not have so that we can get it that the benefits out to the the individual's faster we have less time to do all of those checks there's a you know it's it it's a given tank on the waiting week if we put the waiting week back in place individuals are going to have to wait longer for that initial payment of right now that's paid by that first waiting with his pet that first week is paid by the federal government we put the waiting week back in place we don't have those funds and those individuals don't don't get their their payment until the second or third week after that a claim for that second week some of the I appreciate. You for bringing this up because it is something we're looking at we do so definitely it's it's become very obvious to us the things in our current you I system that were not able to do because of the fact that the the the the programming that and language that was used when that was written twenty plus years ago and today we can do a lot more and catch those things on the front in it is finally you mention a and dollars funding for update are you getting any cares ACT money or other moneys to update our system yes Sir the cares that committee approved some funding for for modernization I'm not in class yes but for that but I want to make sure that that part of the discussion but it's minimal it's just today some some minor of. Items in the P. U. I. system and what's allowed under the cares act is directly related to the pandemic it's not it's not a system overhaul no Sir that there is things it probably needs to be done absolutely yes Sir thank you thank you. I think Senator Senator hammer you're recognized for a question thank you Mr chair I want to start first of all Mister Hicks when did you first realize that the unemployment fund was in trouble to the point that. Money would have to be asked for the care she committee. All that is what led up to the request in June was my reviews of the trust fund in the collections in the pay outs and and trying to estimate working with other people on the program staff and then you reported that to who I reported that to Dr Childress and to misty the and that was reported in to Mister Preston and so that was in June. May and June yes Sir by Dave Jean okay and did you go up to the governor after that do you know. I do not know Sir okay and then there's a letter that was sent out by Representative Lundstrum back on June ninth of twenty twenty requesting two hundred million be satisfied out of the carriers act and she cited some pretty good reasons as to why should be set aside and given to the trust fund what were the discussions around that request and I'll I'll peel to any of you and then I want to ask Mister Preston the same question okay I'll speak to the request by Representative Lundstrum that that to mine of as far as I know that letter went to the governor I'm not sure who all was copied on that letter but I believe it was in a request for two hundred fifty million I have seen the letter that was you know based on a ballots that she was given at the time of our trust fund obviously that something that we share often and and and regularly so then as far as what happened after that letter was received I'm not aware of what what steps were taken after that but we continue to to monitor and look at numbers as we went for because I request initially based on the numbers that Brian had in the prospectus was about three hundred fifty million and we expected it to be to play the of trust fund to be depleted in October November of this year based on current claims surgeon member of Senator hammer that letter was added into the record of the committee this morning and is available for any member and I would like to have a copy we have enough copies for all members present. Thank you Mr few more questions please thank you. So you're testified today that back in June that you knew it which represent Lundstrum came pretty close to two hundred million and you're forced today asking for a hundred sixty five million is that a fair statement. I heard her number was to ride by her calculations and having been involved in the unemployment trust fund legislation in the past I'm not sure how she arrived at that number okay and then to Mr pressed I would ask you you're aware of the request being a member of the carriage tech committee that Representative Lundstrum sent and asked for it what was the conversation around the cares act the committee as far as why that was not honored and why action was not taken upon it back then. Yes. And that came the. To the time that we. the doctor tiller submitted the information because committee of the trust fund in the car were at that time three hundred fifty million dollar projection of the shortfall and that's when we first presentations to the kids committee and as as is gonna be cash committee not every item is taken on a lot of times there's just a. A presentation about the issue rather need AS an action not taking that that and so this is that uh I've been discussed with the committee the members of the steering committee at that time action was taken. And in subsequent meetings I get back to Houston reports as to what the balance of the trust fund. Is that the time. So you all could have done it back then but I'm just curious with all the discussion hindsight twenty twenty why you didn't press it harder for to go ahead to be granted by the carriers steering committee. Taking care of back then but we discussed this morning was that at that time three hundred fifty. Three fifty one and ninety seven assigned and. Was was not needed but there was an action that was taken it was decided to you know note to that actually that was going to be needed by that time it was not taking this is something that was Medicare's committee it was just something that was going to a densely com attest to the state. All right and then Mister Hicks less questions based on your current projections how far out do you think we are in recouping the hundred sixty five billion based on the current trends. If you run the numbers to know based on the direction where we are right now we've gained some ground is what I've heard testimony of today you know that we went from three fifty down to one sixty five it's kind of xcelerated so what's the current projections as far as how far out into the future take us to recoup that hundred six five million that you're getting from the carriers ACT money. Are you done it yet. Not sure fully understand your question about recouping the under sixty five million but in terms of whether or not that will keep a solvent as for as our projections are that we can foresee the future will. Barring anything totally unknown hill with the economy that we do expect the trust fund to remain solvent so you know in terms of what the of collections will be for going from the seven thousand to the ten thousand ul the there are some projections there for how many millions of dollars that would bring in will and then Though what the in the sixty six million that the whole point. Percent change in the service as taxes on six from me per precluded of that would have been by sixty six men in the year of is what that saves the Arkansas employers of. So in that regard you know you look in that a sixty six million persons one sixty five that mean the years to recoup if that's what your question is alright thank you thank you Mr. Senator. members we still got quite a few folks in the queue and we have to be out of here by noon so I just want to remind everybody of Representative love you're recognized for a question. Thank you Mr chairman of a couple of. So if we don't pass this request today will what is what's going to happen and I happen directed to to miss children's or a secretary press and rip Representative of the request was past Friday by signature of the chairs and emergency action. The within one week what we are in doubt and. The timing of the request. Not. Senator Chesterfield if you would hit your button I think I hit it twice. A you're recognized center thank thank you and Thank you Representative love but just clarify I am concerned about. The processes that you have in place to make sure. That the system itself is not being defrauded do you have a step by step process by which you determine when fraud exist. Okay senator Chesterfield yes within the P. U. a system that can be done through Various of of runs of that data to determine those factors so we're looking at factors that are that are in line with what would. Usually eight to five and they are clearly defined second question I and I like to be read you alluded to the fact that you attorneys over these fraudulent Suspicions over to. The proper authorities. Yes ma'am have you heard anything from them yet. We continue to communicate with them as we are given information and they communicate with us when they are when there is additional information that they need us to to pool for them so they can better analyze the data but is anybody been prosecuted to your knowledge not to my knowledge in my last question. We were not very nimble when we have to put into place the six hundred dollars and because we have not dealt with the gig employers before employees before we got the additional three hundred dollars that K. me and how we've been nimble and making sure that people get that money or it's the steel out there waiting to be distributed. As we have distributed three weeks of the lost wages assistance program because we already had the system set up for the six hundred dollars there were fewer changes that had to be made we were more nimble yes ma'am providing this one is the last week or has that pass the people get the additional three hundred dollars add this past Sunday and Monday we made the last payments for week ending eight fifteen based on the funds that we have from FEMA and we're looking at future weeks and and looking at those numbers and determining whether or not we have the match to pay out those funds the fame of funds are not just in and out it requires a state match for the benefits and FOR the administrative cost and what we are seeing is that because of our unemployment numbers started dropping that week because the six hundred dollars one away and people started going back to work we're seeing fewer dollars being paid out of the unemployment trust fund which is a good thing but it gives us less money to make our match and so we're looking at where we are the numbers now that we've paid out the first three weeks and we are we able to obtain more funds to go into weeks four five and six the first set of funds came from the cares that committee so that will be a discussion and with the the the cares that committee if it if it's decided that we will pay out additional weeks. And am I to understand then that there was at one time a fraud division within your division does that no longer exist yes ma'am we've always had to have fraud unit within unemployment insurance and I deal not being utilized read that rather than the F. B. I. in the state police it is and and and and where we've added staff to those units but when it comes to the point of a fried ringing and and the at the numbers that we have it's it's beyond just unintentional and and non fraud issues it's it's well above what what I fraud unit could handle and and at the end of the day eight could all go to to external investigators and and prosecution for any of those it just the numbers are just are just so large now that they were involved earlier on thank you thank you thank you. Thank senators senator Irvin you're recognized. You can request. From the regular. There we go okay thank you Mr chair so I just. I just wanted to add you know at the previous at the previous steering committee task force meeting before the emergency meeting I had asked for a balance of the unemployment trust fund and an update and the status on the fund itself so and then when a lit chair Elizabeth Smith found out and called the meeting I I immediately sent text messages to senator Flippo add to get that were word out to the legislature as quickly as we could for people to tune in and watch this two years task force meeting one of the reasons I just wanted to just to kind of add into the conversation that Senator hammer was talking about one of the the keys about setting aside the two hundred fifty million dollars from my perspective and how why I voted to support that was because of the unemployment trust fund because businesses did not do anything to bring this about on themselves this is something that happened to them. And so I felt very strongly that we needed to lease at this money aside because at the end of the year it would be an easier suite to spend that money according to the federal guidelines we have to spend the money and that's the easiest way to spend that money and stabilize that trust fund so and I spoke and worked with a lot of my colleagues that share that as same concern with me and I felt like that was what represented the majority of the senators that I spoke to about this issue one of the questions I have for D. W. as though is when you made or commerce when you made the presentation in June were you aware of the September thirtieth date. I'll be glad to answer that question US secretary Preston yes we were aware of the September thirty date for setting the at that point setting the looking at the trust fund balance that sets the stabilization right based on September thirty again that's what's that's what's in law it's right as I understand him for thirty right so I guess the question was you know and you may have already addressed this I was late because of a rack but why didn't we bring it up at the previous meeting or towards the end of September knowing that that September thirtieth date was going to come because I personally was driving to Florida and the day that we have this task force I was trying to move my daughter. The head you know we're we all have lives while trying to plan our lives and thankfully we were able to join by zoom but I think it was unfair to the members of the task force as well and and chair Smith did not find out about it until the day before either and so you know we accommodate we jump on it we do what we can but it puts us in a horrible position so you know why did you wait so long. Is Mike as really my question for FOR the department of commerce why did we wait and then do it the way we did it. Senator pressed and I'll be glad to answer that if you would like. Okay so as as US senator Irvin thank you for the question yes we did talk about this earlier this was something that we were analyzing on a daily basis we were hopeful we would not have to ask for any money and in doing so now that we've discussed in this committee and and understanding the frustration of this committee what we should have done is gone ahead and ask for more than what we needed or what we needed at that day at that time in anticipation of of what the balance would look like on September thirty so that that that could have given the committee the steering committee and this body more time to look at those numbers and understand why we let me are going to need that money and I appreciate that let me just let me just say no it should have been on the task force agenda before the September ale see meetings. That is when it should have occurred. And so that is the problem and and so and this is been a consistent problem with different things so that should have been that should be the answer we fails we did not communicate we were not organize we did not put this on the agenda before the September ALC meeting so that the legislature could have full information and knowledge and you didn't put the task force members in a bad position or the legislature in a bad position that that's the answer and I think that's. Needs to be really really clear and we need to understand that I was here when the legislation was passed I understand was a huge issue it was a huge problem that state of Arkansas had to deal with huge problem and we worked very hard to solve that problem and we had to borrow money from the federal government to get us out of the hole that we were in none of us wants to go back down that path I don't so this was a very smart thing to do it's just the way we did it was not the right way to do it let's stop doing this please please please bring things before this body before a A LCD so that everybody has the opportunity to be able to make a and forms decision and we can be professional about the dialogue and the debate that we need to and that is my request as I'm sure others thank you. Thank you senator center RAPERT sorry about your Mike I I hear it's that because it had standards name on it so this record thank you Mr chairman of I've been listening all this now for a good while here and wanted to ask a question because I don't think this is been spoken to or I don't think it's been specifically asked at what time was the governor's office what time the governor Hutchinson when was he informed. About this particular shortfall. That's for any of the the care to answer. Speak to the. As you said. So the trust fund shortfalls been an issue that we we we talked about that last September twentieth last Wednesday and standards of those mentioned when we received the of funding Ending a map that was going to be needed that afternoon that information was with A and subsequently the the governor's office as well. Okay so you're saying that he the governor Hutchinson nor his leadership and his staff knew anything about this until September twenty third as well. So. I'm sorry Mr secretary I see had shaken no so I'm not sure if it's no he knew beforehand or or what so maybe somebody could jump in here clarify for me because we've heard some earlier dates talked about and I'm just you know the reason I ask the question and I know you're here and you're on the spot but actually you work for the governor of the state of Arkansas so I wanted to know when the governor of Arkansas knew about the shortfall. This is to send the information to the governor's office on that Wednesday. Afternoon of that information that we received from. Services are and the exact amount that we would need to start the trust fund that information was instead with the governor's office. It is that also the first time in which she actually knew that you were going to speak expect a big shortfall is just as the amount the time in which he was informed of what you wanted to ask the cares ACT four I'm really trying to find out when he would have known that we were going to see this you shortfall. Six a president if I may. so as secretary Preston said the governor has been informed all along of the amount of money two three hundred fifty million that we anticipated due to a shortfall in the unemployment trust fund. We even thought early on that the trust fund would be depleted by October November and I've said that before as we as we approach the H. month and looked at the the information that that we had based on the the funding in an out of the trust fund sixty Preston and numerous others were aware of that volatility and also what the balance was and that we were looking at it based on the law what was required at the of the ballots in order to keep the stabilization right at point two percent so the governor was aware however as I said earlier and I. Sorry that sent Senator Irvin wasn't here to hear this I submitted that information to secretary prestin Wednesday morning of the kids that committee that was not enough time and that was my fault for not giving him that information earlier if I'd given it to in the day before it would have been a different number but it probably would have been close enough for us to know that we were going to need money for the cares act so as I said earlier the governor was aware secretary Preston was aware but it's my responsibility is the date of yester rector to report that number and to submit that to secretary precedence so that he can form inform the governor I apologize to this committee and FOR and and and two of the body for not informing you earlier and letting you know exactly what it what that. Amount was going to be if I had known I didn't know that we were we were in better shape than we anticipated because first we ask for three fifty but we could have gone to the committee earlier yes Sir Senator Rapert ask for the money earlier as it's been discussed here and then given back the money that wasn't needed yes Sir. She chancer it I guess really after what we just went through a few days ago with the employed fully benefits division and with the health plan what what I'm concerned about is really and this is a message for the governor's office is that it seems lack that we're consistently being the last informed. And it's always it's a last minute opportunity that's not the way and I know my colleagues have made this point I just hope that in the future if it takes this legislature passing legislation. To ensure that we do not create a bypass around the legislative body in the future I think we need to do it I have really been concerned about what I've been saying the last few weeks and months where it seems that these appointed entities seem to be the ones that are making all the decisions in works to expected to just rubber stamp things that's not appropriate that's not one of the people of elected me to serve in this body for different times nor any of my colleagues and so I would hope that we we make sure that we steer clear of this and I would appreciate the governor's assistants to ensure that we get proper notification thank you very much. Thank you senator represented solve and you still have questions. This through quickly yeah I asked earlier about the jobs and business closings and I'd. Mister president I did and FOR high for a request to your office was told we don't collect that data yeah when I asked that question to the people here sitting in front of me they say yes we do collect that data so from you do we or do we not collect data on medevac I have three emails from your office one said we don't collect any data the next one said we collect some but you can't have it till November and the next one said what we found some that's for the at from your office but when I'm asked that question to people who were at the table they said yes we do so Mister Preston I don't want to take a time for a long answer but would ask that you please review to find out what businesses are closing and I'd like to have an updated list of that. Is that possible. Yes Sir we can provide you with the list of the information that we have that employers are not required to report to us a closing I understand but I'm. I understand that but if I just want the data that you have because I've had three different emails on three different days and it just doesn't sound like the secretary's office is understands what's going on with that information and also make this statement in closing I hope you we have to health concerns one is the health of our citizens the fiscal health of our citizens have we've heard today a big concern is the economic health of our businesses and I would ask secretary prestin if you would to ask the governor if you will include a business update on business closings and the economic impact of that in his weekly reports to the community I think it will help us get our businesses back going and the economy back in order when people understand how serious this is thank you Mr chair. Thank you Representative Representative rye do you have a question. Yes Sir thank you Mr chairman just one question Mr chairman of this one hundred sixty five million dollars just wonder. about this money could this down the line charades could this affect our rates that are employers or having to to pay. A yes I represent a right thank you for the question obviously we are holding the stabilization right the same but there's also the taxable wage base and the experience writing so we know that the taxable wage base will go from seven thousand to ten thousand it just dropped to seven this year for this year this calendar year and then the experience writing that will be used in the calculation as well so I'll ask the peer center Brian Hicks to speak to those points exactly of what that increase may be because it's all based on averages and and of course right now based on based on some assumptions. In a non the seven to ten that the you know in terms of the experience rating That you know that information is still being collected of by our pro program staff and that could have a very significant impact to the rates of the employers so and decisional increase of specially for the smaller employers of small you know just one or two or three claimant's claim in the small employer can have and it's very very significant changing the rage two three times the rate would be common one of the things that this under sixty five million dollars Laos the agency to do. Is look at the laws both federal and state as well as the trust fund and the payments to see about not charging the employer experience rating the claims that have come against them during covert so we are working on that aspect as well and I'm certainly leadership would be happy to report to the body what the result of that review would be in terms of one one can we will not charge the employers the claims furtive covered and not because their rates to increase and also looking at the trust fund balance in the house the trust fund to make sure that if we don't have those other increases that was still be solvent you know going into the foreseeable future. Okay committee members we have one question left Senator hammer and then we have two items of housekeeping to handle right after Senator hammer so Senator hammer you're recognized for the last question thank you Mr chair two things one I could of swore at the beginning of all this that we were told that the feds would not hold it against us when it came to the rates because of the co would pandemic and I've had other members that have remembered the same thing so is that true or is it not true that the rates should not be we should be getting penalized by the feds because of the covert situation. It's not so much of one not the will be penalized by the federal government it's of application of charging the employer's I'll and the question may be answered about whether not to be a federal issue with that Ole but we are looking at the state laws as I understand it and also I'm looking at the trust fund balance so and looking at that as in the impact of the employers tax rates not going up and not having that additional collection alright we'll have a follow up off line on that the second one is would you reported the numbers and I guess it came to Dr Childress when the numbers were reported what is it about the numbers that Mister Hicks gave you that you I get the impression either didn't take him serious or what was the reasoning for not accepting the projection that Mister Hicks gave that we were going to be at three hundred sixty five. A Senator hammer I took that seriously I immediately wrote a memo of thought that to the attention of secretary Preston and and then subsequently to the cares that committee for that G. three intern fifty million dollar request was that back in June that was back in June yes Sir. Then I I just I'm not gonna beat beat the horse a more but I just fail to understand why it was enacted on back then and it came down to the last minute if the projections were accurate and the warning bell was sounded back then that action wasn't taken to move the money back then instead of waiting to the last minute or my missing at the projections were based on what we were experiencing with initial and continuing claims that was before we were right at the time we were putting into place three new product federal programs under the cares act legislation and and you know there was no ACT predictions made you know our predictions made in February as to what the balance would look like in March and predictions made in June for what it would look like in in September I predictions have you know I have not been I hate to say that you know they they've been based on information that it all that we could now about what's going to happen in a pandemic which is very little so those predictions did sound an alarm that's why we ask we were looking at possibly needing three hundred and fifty million that was discussed with the cares that committee you know and as I said earlier we were hopeful that we would need any money as we started following the trust fund balance and seeing what was happening with people returning to work and our initial claims dropping. Quick. I think there's two full problem here educator Mike again please we need to get on the record. Thank you I want you on the other colleagues I think there's a two fold problem here number one we participated in it in that we gave everybody too much power legislatively we let it go out the door the second full pro and we on that the part I think that you all own an odd one joint my colleagues to say that with as much power as we gave you it's being disrespected in that we are finding out things at the last minute and I think it's going to make for an interesting general session when we get there thank you Mr. Thank you members something I meant to do it again to meet nine others few of us left we got our coffee pots turned back on today hello thank staff of there comes rules with that. Members we need to pick up all of our own trash that means our water bottles are coffee cups we need to pick up anything mouse touches so let's put all that in the trash and help our staff out second thing Representative wing. Recognize you real quick you know it's a great way to be able to book in this meeting in which we dealt with some very very important issues and we certainly don't want to make light of that were I'm grateful for the input on this meeting but also we begin it with a birthday let's send it with the birthday of eleven house minority leader Representative Tippi McCullough also for the first day today. Thank you Representative wing also I would as a chairs request and I've spoken to represent a senator Bledsoe we want you guys to report to us at the October November and December meeting on where we're at with the fraud and where we at with this trust fund going forward with that we have no further business we stand Jr.