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DEED outlines why Minnesota's UI trust fund has dropped as benefit payments rise
Summary
Deputy Commissioner Devin Roe told the Jobs and Economic Development Committee that rising benefit payments, wage growth and statutory timing of tax-rate recalculations explain most of a recent drop in the unemployment insurance trust fund; he said program integrity metrics remain strong.
Deputy Commissioner Devin Roe of the Minnesota Department of Employment and Economic Development briefed the Jobs and Economic Development Committee on the state's unemployment insurance program and why the UI trust fund balance has fallen despite low unemployment.
Roe summarized how UI is structured and why the trust fund can shrink before tax collections rise. "The purpose of unemployment insurance, as written in statute, is that the public good is promoted by providing workers who are unemployed, through no fault of their own, a temporary partial wage replacement to assist the unemployed worker to become reemployed," Roe said, explaining eligibility and the 26-week benefit standard.
He emphasized that UI is a federal-state partnership and described the fund's revenue mechanics: employer taxes consist of an experience rate (based on an employer's recent UI charges) and a base tax rate applied to a taxable wage base…
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