Most states have either repaid what they borrowed for their unemployment funds or never borrowed in the first place. Illinois is one of ten states with loans still outstanding. The other states that joined Mendoza’s request to the Treasury are, like Illinois, heavily Democratic — New York, Colorado, Pennsylvania, Connecticut, New Jersey, Massachusetts and Minnesota. A recent research report detailed how federal pandemic bailout money, in general, has gone disproportionately to Democratic states.
As for Mendoza’s claim that Illinois is paying its bill, that’s simply not true. The state entirely ignored the hole in its unemployment fund in its current budget and future budget forecasts. In reality, the state will not just have to repay the loan but must also restore the fund to a sound balance, which will probably take another $1.5 billion at least, which was the balance before the pandemic. Nor does Illinois pay its full bill for the 800-pound gorilla, pensions. Year after year it contributes far less to its pension funds than actuaries say is required to prevent unfunded liabilities from growing.
States are permitted to replenish their unemployment compensation (UC) trust funds using the $195.3 billion they received in Fiscal Recovery Funds under the American Rescue Plan Act (ARPA)—and they need the help, having paid out $175 billion in state-funded benefits since the start of the pandemic, in addition to the $661 billion shelled out by the federal government in extended and expanded benefits, for a total of about $836 billion between January 27, 2020 and September 11, 2021.
Pre-pandemic trust fund balances stood at $72.5 billion. Today, aggregate trust fund balances are negative, at -$11.1 billion, reflecting $44.8 billion in indebtedness currently incurred by 10 states and the U.S. Virgin Islands. By federal standards, 34 state accounts are currently insolvent, with $114.6 billion needed to bring them all up to what the federal government regards as minimum adequate levels.
Americans last year saw their first significant decline in household income in nearly a decade, government data showed, with economic pain from the Covid-19 pandemic prompting government aid that helped keep millions from falling into poverty.
An annual assessment of the nation’s financial well-being, released Tuesday by the Census Bureau, offered insight into how households fared during the pandemic’s first year. It arrives as Washington debates how much more to spend to bolster the economy during the worst public-health crisis in a century.
Median household income was about $67,500 in 2020, down 2.9% from the prior year, when it hit an inflation-adjusted historical high. It came as the U.S. last year saw millions lose their jobs and national unemployment soar from a 50-year low to a high of 14.8%.
The last time median household income fell significantly was 2011, in the aftermath of the 2007-09 recession.
The Census Bureau’s topline income figure includes unemployment benefits but doesn’t account for income and payroll taxes nor stimulus checks or other noncash benefits like federal food programs. If those had been counted, the median household income would have risen 4% to $62,773.
Federal unemployment benefits ended this month for millions of Americans and data show that workers in Virginia might feel it the most.
The federal government’s enhanced unemployment benefit added $300 to weekly unemployment checks issued by states and also expanded coverage to the self-employed and freelancers, such as rideshare drivers and musicians. That expansion, called pandemic unemployment assistance (PUA) was a lifeline for these gig workers who previously weren’t eligible for any unemployment help.
An analysis I did for the Rockefeller Institute of Government on unemployment benefits given to non-traditional workers shows that the PUA program had the biggest financial impact in Virginia, where those payments accounted for nearly 26% of all unemployment benefits paid in 2020.