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Capitol Alert
The latest on California politics and government
November 11, 2013

Although California’s once-dismal employment picture is slowly improving, the state’s Unemployment Insurance Fund is not only plagued by digital glitches, but is still paying out more in benefits than employers are paying into the UIF in taxes, according to a new report from the state Department of Employment Development.

Some other revenue, including earnings on fund balances, are offsetting the shortfall, so the immense deficit in the UIF, $10.2 billion at the end of 2012, will decline fractionally to $9.7 billion by the end of this year, the EDD report predicts, then continue to decline as employment improves and insurance benefit payouts drop.

The UIF deficit has been covered by loans from the federal government, on which the state is now paying interest, and the feds have also boosted their share of employers’ payroll taxes to begin repaying the debt.

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