March 01, 2021

COVID-19 and the Unemployment Insurance Trust Fund

The job loss related to COVID-19 has placed an unprecedented strain on our economy and our unemployment insurance (UI) system. The strain on the UI system creates two major policy challenges that require near-term action. First, unemployment taxes on employers are scheduled to skyrocket at the end of March, further hindering job retention and creation. Second, the state needs to repay federal loans (and associated interest) that have propped up the state’s unemployment system over the last year while also ensuring the state’s trust fund remains solvent and can meet benefit demand.