Were You Aware of This?

[bobbysgirl]

States borrowed billions from the federal government to pay unemployment benefits. The loans were interest free for 2 years (ended 12/31) and interest is due in September 2011.

Holy smokes. These states had funds that were taken out of worker's checks to provide for an emergency. It appears they raided the funds for other projects. Enron execs did that and we consider them criminals (rightly so). Why can government officials do this and not be prosecuted?


www.msnbc.msn.com/id/41086473/ns/politics-the_new_york_times

[upstatemom]

Guess Coumo forgot to talk about this big problem during his state of the state, but in NY the elected officials still think if you ignore a problem, it will go away.
New York state legislatures have raided all the designated funds in this state, but think its OK because when they leave office they get a cushy payback job in one of the useless state authorities and they are set for life!

[Savoir Faire-Demogague in NJ]

I have not heard anything about states raiding unemployment insurance funds. I quickly scanned the article in the link and did not see anything suggesting states have raided these funds.

There are many states with much larger problems relative to state pensions. In NY State, in 2010, they made their mandatory contribution to the pension fund, by borrowing the money from the pension fund to make the contribution.

[upstatemom]

Jan 15, 2011 9:06:24 GMT -5 Savoir Faire-Demogague in NJ said:

I have not heard anything about states raiding unemployment insurance funds. I quickly scanned the article in the link and did not see anything suggesting states have raided these funds.

There are many states with much larger problems relative to state pensions. In NY State, in 2010, they made their mandatory contribution to the pension fund, by borrowing the money from the pension fund to make the contribution.

Very true about the pension funds, we are in deep trouble in NY. NY state has raided the highway funds and other dedicated fund so I would not be surprised if they raided the unemployment funds as they talk about in this article. Much of the fund raiding was done in the last 10- 15 years, so those many of those who made the decisions are no longer in office but are collecting those cushy pensions or in other cushy state jobs

[Opti]

I was aware quite a few states borrowed from the federal government to
pay unemployment. I wasn't aware of when the interest was due.

[Savoir Faire-Demogague in NJ]

NY state has raided the highway funds


So have many other states as well as the federal govt, to fund other much and badly needed social programs.
Yet there is much hew and cry about the crumbling and decaying infrastructure. Not wonder, our per gallon gas taxes supposedly dedicated to roads, bridges, tunnels, etc., is being frittered away on social spending.

[resolution]

In almost every state the unemployment fund is funded by taxes on employers. When times were good and the claims were low, the states lowered the taxes on employers to remain competitive with other states. Once the recession hit the funds started getting drained by all the claims but the states were afraid to raise the taxes back up and hurt employers.

[bobbysgirl]

Don't workers pay into the unemployment fund in NY as well?

[Deleted]

Jan 15, 2011 9:53:05 GMT -5 resolution said:

In almost every state the unemployment fund is funded by taxes on employers. When times were good and the claims were low, the states lowered the taxes on employers to remain competitive with other states. Once the recession hit the funds started getting drained by all the claims but the states were afraid to raise the taxes back up and hurt employers.

That would be my guess. The premiums paid (minus administrative expenses, which is probably an area that needs investigation) did go to the unemployed- they just had more unemployed than expected.

[resolution]

The states are responsible to pay the benefits from their unemployment fund and the feds pay for the administrative costs. I agree the administrative costs could be looked at, but the funds have been drained paying actual benefits and not administrative costs. www.cbpp.org/cms/index.cfm?fa=view&id=1466 workforcesecurity.doleta.gov/unemploy/uitaxtopic.asp

[The J]

The funds weren't raided. The funds were insufficient to deal with a huge uptick in unemployment and all the federal extensions.

[kinetickid]

Jan 15, 2011 9:06:24 GMT -5 Savoir Faire-Demogague in NJ said:

I have not heard anything about states raiding unemployment insurance funds. I quickly scanned the article in the link and did not see anything suggesting states have raided these funds.

I agree. From what I've heard/read, states just didn't collect enough to pay the benefits for the large number of chronically unemployed. The Feds set a minimum collection amount, and states only collected the minimum. But that minimum just hasn't been enough to pay benefits to all those who qualify.