Florida borrows 1.6 billion from the FEDS

[30ashopper]

State Unemployment Trust Fund Loans

Whether the State trust fund balances are adequate is ultimately a matter about which each State must decide. States have a great deal of autonomy in how they establish and run their unemployment system. However, the framework established by the Federal Government requires States to actually pay the level of benefits they determine to be appropriate; in budget terms, unemployment benefits are an entitlement (although the program is financed by a dedicated tax imposed on employers and employees and not by general revenues). Thus, if a recession hits a given State and results in a depletion of that State's trust account, the State is legally required to continue paying benefits. To do so, the State will be forced to borrow money from the Federal Unemployment Account. As a result, not only will the State be required to continue paying benefits, it will also be required to repay the funds plus interest it has borrowed from the Federal loan account. Such States will probably be forced to raise taxes on their employers, an action that dampens economic growth and job creation. In short, States have strong incentives to keep adequate funds in their trust fund accounts.

http://www.policyalmanac.org/social_welfare/archive/unemployment_compensation.shtml

Florida, borrowed: $1,612,500,000.00 (1.6 billion plus interest)
Started borrowing: August, 2009

Did anybody know this was going on? Also, why is the federal government involved in our unemployment compensation system to begin with.. and how did the FEDs gain the right to force us to borrow from them, at an interest rate they set?

 

[beachFool]

State Unemployment Trust Fund Loans


Unemployment Compensation

Florida, borrowed: $1,612,500,000.00 (1.6 billion plus interest)
Started borrowing: August, 2009

Did anybody know this was going on? Also, why is the federal government involved in our unemployment compensation system to begin with.. and how did the FEDs gain the right to force us to borrow from them, at an interest rate they set?

A. Yep, I knew about this one.
B. There are a host of federal laws that deal with unemployment benes.
C. Florida's method/system of funding unemployment benefits is definitely part of the problem.
D. The Recovery Act of 2009 specifically had money designated for unemployment benefits. The FL legislature specifically returned that money.

Now we are borrowing money that we didn't really have to borrow.

http://www.nytimes.com/2009/04/28/us/28florida.html

"Days from the end of the legislative session, Florida lawmakers have refused to move a bill to expand unemployment eligibility in order to accept $444 million in federal stimulus aid."

:rofl:

 

[30ashopper]

A. Yep, I knew about this one.
B. There are a host of federal laws that deal with unemployment benes.
C. Florida's method/system of funding unemployment benefits is definitely part of the problem.
D. The Recovery Act of 2009 specifically had money designated for unemployment benefits. The FL legislature specifically returned that money.

Now we are borrowing money that we didn't really have to borrow.

http://www.nytimes.com/2009/04/28/us/28florida.html

"Days from the end of the legislative session, Florida lawmakers have refused to move a bill to expand unemployment eligibility in order to accept $444 million in federal stimulus aid."

:rofl:

Your quote sums up why we refused it, long term, keeping these costs down makes good financial sense.

Personally though, I'd prefer we weren't borrowing to cover the deficit.

 

[beachFool]

Your quote sums up why we refused it, long term, keeping these costs down makes good financial sense.

Personally though, I'd prefer we weren't borrowing to cover the deficit.

 

[30ashopper]

What you might want to be asking is - why did the democrats in congress, during a time of great need, use uneployment funding as a form of extortion, instead of doing the more compassionate thing, and simply helping the states out?

Apparently keeping people's unemployment checks flowing wasn't as important as winning votes and forcing certain political ideologies on the states.

"Never waste a good crisis!"

 

[beachmouse]

Because that would be supporting financial irresponsibility on the part of the states. Florida seriously underpriced the unemployment tax for years in the name of being business-friendly. And got away with it because we had a period of historically below the norm unemployment. But the state seriously gambled because they didn't have reserves on hand to handle unemployment compensation if we did get above average unemployment again, and they lost the gamble.

 

[beachFool]

What makes the FL legislature irresponsible is that they KNEW the unemployment fund was running out of money, yet they chose to decline funds specifically dedicated to unemployment.

Well played, sir.

According to moodys.com enhancing unemployment benefits are a very effective in stimulating an economy struggliing with a near-Depression.

Food stamps offer best stimulus - study - Jan. 29, 2008

This is too important for knee-jerk partisan stances.