SLC Issue Alert | April 2014

SLC State Unemployment Insurance Finances Improve

As a result of the doggedly high unemployment rates in so many states during the Great Recession and the actions taken by states (such as expanding unemployment benefits and cutting unemployment insurance taxes), the unemployment insurance funds in a majority of the states were thrust into perilous shape. The funds were attacked at both ends: more people were tapping benefits while a shrinking number of companies were paying fewer taxes to replenish the funds. With the deleterious effects of the Great Recession tapering off and the employment situation in the SLC states improving, fewer and fewer individuals were eligible for unemployment insurance payments by 2013. As a result of this development and essential reforms to state plans, the balances of these trust funds improved significantly by 2013.