Business & Economy

California’s jobless benefits fund faces $20 billion deficit

Listen to story

Download this story 0.0MB

California’s unemployment insurance fund is more than $6 billion in the red. A report out today predicts that the deficit will balloon to 20 billion bucks by the end of next year.

California employers contribute to the unemployment insurance fund that pays weekly benefits to workers who lose their jobs through no fault of their own. Last year a record number of Californians found themselves in that position.

The jump in requests for help drained the unemployment fund.

The federal government enabled California to continue benefits with American Recovery and Reinvestment Act dollars. But that federal, interest-free loan ends this year.

California’s non-partisan legislative analyst predicts that the state’s jobless fund will plummet $20 billion into the red by next year – unless lawmakers enact some changes.

The legislative analyst recommends two: reduce unemployment benefits a bit and increase employer’s contributions a bit.

The trick will be getting the legislature to vote for those changes. Three recent attempts failed to muster enough support.