Thursday, January 19, 2012
We know that public and private pensions are feeling a world of underfunded hurt right now. So are state unemployment compensation funds, according to the report Unemployment Insurance and the Great Recession (December 2011) of the Urban Institute by Wayne Vroman:
This issue brief examines the unprecedented funding problem of state unemployment insurance (UI) programs. The majority of UI programs (36 of 53) have borrowed, securing record loan amounts to maintain unemployment insurance benefit payments during 2009-2011. It identifies the causes of the funding problem, discusses borrowing options for states and describes policy responses at both the state and federal levels. State actions have included both tax increases and benefit reductions. Federal policy proposals have addressed the low UI taxable wage base in most states and have offered partial debt forgiveness in return for state actions to improve solvency. To date, policy actions have been slow at both the state and federal levels of government.
Hat tip: Carol Furnish.