Bill Uses COVID Funds for Unemployment Fund

State lawmakers advanced a new proposal to put $450 million in COVID-19 relief funds from the federal government into the state’s unemployment program to help cover losses from fraudulent claims.

The House commerce committee approved the bill on a voice vote, sending it to the full House for debate.

Lawmakers are worried that employers, who pay taxes to finance unemployment benefits, will be on the hook to cover fraudulent claims, and that the state will be forced to cut parts of its budget if it tries to protect employers.

Some Democrats were wary of the proposal to set aside COVID-19 funds, worried that it could divert money from other relief efforts.

The bill also sets up a new council to oversee the modernization of the state Department of Labor’s computers, and requires the agency to finish the upgrades by the end of 2022.

Department officials have told the committee that its timeline is not realistic.