La.’s unemployment trust fund running out of money; governor says jobs are available
NEW ORLEANS, La. (WVUE) -Governor John Bel Edwards points to thousands of available jobs as Louisiana’s fund that covers jobless benefits is almost dry. And leaders of the legislature say they do not want businesses to face higher taxes to keep the fund solvent. They say there are other ways to achieve that.
The state of the trust fund commanded a lot of attention during the meeting of the Louisiana Economic Recovery Task Force meeting.
Jason DeCuir chairs the panel.
“We’re looking at the middle of September this thing is going to be depleted,” said DeCuir.
The Louisiana Workforce Commission or the Department of Labor says as of August 5 the trust fund balance was $270,361,430.89.
State Senate President Page Cortez said he is having discussions with Gov. John Bel Edwards about the situation.
“The governor has had a conversation with the [House] Speaker and I, a number of conversations, he’s very concerned as we all are that if we start hitting these triggers there’s going to either be an assessment on businesses to replenish it or ultimately a tax; either way you look at it it’s a backdoor tax,” said Cortez.
House Speaker Clay Schexnayder says he favors finding a way to replenish the fund that does not penalize businesses.
“Protecting these small businesses and those businesses out there is our first priority as far as getting them, without having this tax put on them,” said Schexnayder.
Both he and Cortez are eyeing the latest stimulus package being negotiated on Capitol Hill as a means for infusing money into the fund.
“The numbers that are coming out of D.C. are $3 trillion package and a $1 trillion, so in the negotiations you figure it will be close to a $2 trillion package likely negotiated and some of that would come down as flexible dollars to the states to appropriate. I think that would be one of the first priorities to make sure that we don’t put a backdoor tax on the businesses,” said Cortez.
The LWC says the state has a legal obligation to pay unemployment benefits and that it is eligible to apply for a loan from the federal government when it is within 30 days from the date the state anticipates needing funding.
The pandemic has also hit hard tax revenues state government relies on.
“We have a hard road ahead of us to be able to keep things moving forward for our state,” said Schexnayder.
Gov. Edwards said in addressing the trust fund issues that there are jobs available. Recently the $600 weekly federal stipend for the unemployment expired.
“We know that the state benefit is $247 a week and people are simply not going to be able to survive on that. It is time to get those who can back into a job and to find work and there are several thousand jobs available in Louisiana,” said Edwards.
And experts on the economy say unlike Hurricane Katrina, the current pandemic is having a negative impact on jobs around the state.
“This has really affected the entire state and that is part of why the size of this event is actually far larger than Katrina in terms of an impact to the state’s economy, so we have far exceeded the level of unemployment that we saw after Katrina,” said economist Dr. Stephen Barnes who sits on the state’s Revenue Estimating Conference.
He said no one should expect a whirlwind type rebound in terms of jobs and the economy.
“When people lose that job in a depressed economic environment it’s going to take an extended period of time for those folks to find a new opportunity,” said Barnes.
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