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Department of Labor seeks $7.33M in dedicated funds to sustain unemployment operations as federal grants decline
Summary
The Department of Labor told JFAC it needs $7.33 million in dedicated spending authority to maintain unemployment insurance operations as federal pandemic grants taper; the department also requested a $4.87 million cash transfer and described the trust fund and staffing flexibility during downturns.
The Joint Finance‑Appropriations Committee reviewed a fiscal‑year 2026 budget request from the Idaho Department of Labor to increase dedicated spending authority by $7,330,000 for unemployment insurance (UI) operations and to authorize a cash transfer of $4,868,600 from the unemployment penalty and interest fund to the employment security fund.
Janie Rivera, director of the Idaho Department of Labor, told the committee the request is intended to sustain UI determinations, compliance and appeals work as federal pandemic grants decline. “During the pandemic, the department added over 100 people to respond to spikes in claims,” Rivera said. As federal grant funding for UI administration has fallen with lower unemployment, the department seeks additional dedicated‑fund spending authority rather than general fund support to retain core operational capacity and to have stable staffing should the economy deteriorate.
Analysts explained the cash transfer is intended to correct an accounting over‑transfer that moved more money into the unemployment penalty and interest fund than statute intended; the requested transfer would return funds to the continuously appropriated employment security fund and reduce an estimated fiscal‑year‑2026 ending balance by roughly $4 million under the agency’s projections.
Committee members pressed for more detail about staffing levels and flexible hiring authority. Rivera said the department maintains baseline staff for ongoing compliance and tax work and uses excess FTP to surge adjudicators and claims staff during recessions. She described the state UI trust fund as solvent and established by statute to smooth tax rates over multiple years; the department said the fund previously ranged from roughly $69.7 million to $202 million (the 2020 COVID spike) and that if a fund were exhausted the state could borrow federally or use bond authority.
Representative Handy and Senator Galloway asked for precise counts of base staff versus pandemic‑era hires and how much of salary savings were being reallocated; analysts and the director agreed to provide follow‑up numbers to the committee. The governor recommended the enhancements.
No formal votes took place at the hearing. The department offered to supply the committee a more detailed staffing baseline, historic staffing fluctuations during downturns, and an explanation of how federal grant amounts for UI administration are calculated.
