FLORIDA UNEMPLOYMENT TRUST FUND COULD COME UP SHORT IF JOBLESS RATES RISE

By September 3, 2015Blog

Many state unemployment pools are still recovering from the Great Recession. Most have paid back the federal loans they used to pay unemployment claims when their unemployment funds dried up. Now states are refilling those unemployment pools – kind of.

Florida is an example of those states that fall into the “kind of” category. Florida, like some other states, has been slow to resupply their unemployment pool with enough capital to face another economic downturn.

The Department of Labor recommends that states have enough funds to pay for one full year of an average high level of benefit payouts. At this point, six years post recession, Florida is only 66 percent of the way there.

Sixteen states are above the recommended level while 11 are just below, like Florida, and 26 are well below what was considered an adequate level according to the Labor Department.

This Pew Charitable Trusts graphic has more details.

When the issue of Florida’s solvency level was raised to the Florida Department of Economic Opportunity spokeswoman Jessica Sims said the DOL numbers are “a goal, not a mandate.” 

DEO Executive Director Jesse Panuccio then followed Sims remarks with the statement: “The best assistance an unemployed person can receive is a new job. In Florida, job growth is priority one, and that’s why we have pursued a low-tax, business-friendly climate…As Florida’s economy improved, our unemployment compensation trust fund recovered, and among large states our fund is one of the healthiest. This means lower taxes for businesses, who can then reinvest in the growth of our economy.”

Despite the sunny picture being painted by state officials, advocates say Florida’s unemployment system is less than healthy.

Marcia Heroux Pounds writes in the Sun Sentinel:

“Florida’s unemployment insurance program already is one of the worst in the country, unemployment insurance experts say, paying only $275 a week for a maximum of 16 weeks. And only 13 percent of the unemployed collect benefits due to a more stringent system and a difficult-to-navigate online system, according to the National Employment Law Project, an advocate for the unemployed.

If Florida employers paid a little more to the trust fund in good times, they would have to pay less in another economic downturn, said McHugh, at the National Employment Law Project.

He said business advocates “keep the programs under-financed by saying taxes need to be as low as possible. Then, when the recession comes, they say ‘both sides need to make sacrifices.’ When the recovery comes, they do not undo the sacrifices they imposed on workers.”

Even though opinions differ slightly on the overall healthy of the Florida unemployment pool, there may be little doubt that the state would probably end up borrowing money from the federal government again if it was hit by a significant economic downturn.

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