Unemployment Insurance Deficit About To Blow
Anthony Pignataro:
Is it just me, or is disaster just everywhere these days? Unfunded pension debt is exploding. Legislators slipped a secret San Diego stadium deal into the budget at the very last second. Cities like Bell and Vernon are wracked with so many indictments they’re virtually ungovernable. Unemployment is still, to this day, above 12 percent in California.
Ahh, unemployment. To mutilate Winston Churchill, never have so many owed so much to so many. In fact, the Legislative Analyst’s Office released a report today showing that the state Unemployment Insurance program is out of control financially. It ended 2009 with a $6.2 billion deficit; unless something changes soon, it’ll sport a $20 billion deficit at the end of 2011.
This means, according to the report, that the Legislature can either lower unemployment benefits, raise employer tax contributions or do some combination of both — all at a time of crushing unemployment. Oh, and the LAO recommends that the Legislation take “prompt action” to do this “so that the accumulated deficit and associated interest obligation stops growing.”
Prompt action?! From the California Legislature!? I had no idea the LAO had such a dry sense of humor.
OCT. 20, 2010
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