WICHITA | Gov. Mark Parkinson signed a bill Tuesday allowing Kansas to tap into $69 million in federal stimulus funds to help with unemployment benefits.
The legislation allows more out-of-work Kansans to qualify for benefits. It also extends unemployment benefits by another 26 weeks for people enrolled in a state-approved job training program. Jobless benefits normally expire after 26 weeks in Kansas.
The moves were required for the state to draw down the federal stimulus money. Parkinson said the funds will help build up the unemployment compensation fund, which is financed by a tax on employers. The fund has dwindled from $680 million a year ago to about $441 million because of increase claims for jobless benefits.
The hope is that by the time the stimulus money runs out, fewer people will be collecting unemployment, allowing the fund to grow again, Parkinson said.
“Then when we face the next recession, which will inevitably occur because economic cycles are cycles, the trust fund will have enough money that this program can continue,” Parkinson said. “And if we go through a very long downturn, say similar to the 1929 to 1937 period, all bets are off, and we are going to have to look at a different way to solve this.”
Parkinson came to Spirit Aerosystems — the only major Wichita plane-maker that has not announced massive layoffs in recent months — for the bill-signing ceremony. Many of the city’s layoffs have been at business jet manufacturers such as Cessna Aircraft and Hawker Beechcraft Corp.
Parkinson said he knows Wichita, home to several aircraft manufacturers, is used to ups and downs in the economy. But he said there’s still a lot of fear and uncertainty as Americans are still feeling the effects of the economic downturn. According to the most recent numbers available, unemployment in Kansas was at 6.5 percent in March, up from 6.2 percent in February and 4.2 percent in March 2008. Figures for April are expected to be released Friday.
“In order to come out of this morass, we need a lot of things to come together,” Parkinson said. Spirit Aerosystems CEO Jeff Turner said the bill will allow the city to keep a skilled work force that aircraft manufactures would need to tap once the industry recovers.
“It’s already affecting a lot of people in our community, and I think the quicker we can get it in place, the quicker people can use it for technical training,” Turner said.
Spirit does not have time to train workers in boom times because they are putting in so many hours, Turner said. Then when the bust times come, the company has the time, he said, but lacks the funds.
Turner noted that his company has been very fortunate that it still has enough work and hasn’t had to resort to layoffs. But he noted that the company expects that 2010 will be tougher than 2009 has been.
Still, he stressed that the industry is cyclical in nature and said it will recover.
“The one we went through in 2001 looked a lot like the one we are going through right now,” Turner said.