Department of Labor asks for additional spending authority as federal UI grants shrink

The Joint Finance‑Appropriations Committee heard testimony Thursday from Janie Rivera, director of the Idaho Department of Labor, who asked for $7,330,000 in additional spending authority from dedicated funds to maintain unemployment insurance operations amid declining federal grant support.

Rivera told the committee the department relies on a federal‑state partnership for unemployment administration and received large federal grants during the pandemic. As those federal dollars decline, the department faces a gap between federal grant revenue and the ongoing cost of adjudications, claims processing and appeals. "During the pandemic, the department got a significant increase in federal grants... As these federal dollars are declining, we need to keep all of those operations going," Rivera said.

The request would not draw on general funds; Rivera said the department plans to use dedicated unemployment administration funds rather than state general revenue. The committee’s budget analyst, Brooke Dupree, described a proposed cash transfer of $4,868,600 from the Unemployment Penalty and Interest Fund to the Employment Security Fund to correct prior over‑counting and to align fund balances under statute. Dupree said the transfer would reduce the department’s ending fund balance by roughly $4 million.

Rivera also described the unemployment trust fund as "very healthy" and said Idaho has taken statutory steps since the Great Recession to increase resilience — including a target balance roughly 1.3 times what would be needed to cover the three worst years in a rolling window. If the trust fund were to be exhausted, the department can borrow from the federal government or issue bonds, she said.

Committee members asked for additional detail on staff numbers and how salary savings have been used. Rivera said the department increased staff during the pandemic (adding roughly 100 staff for claims and adjudication work), has since seen attrition, and would shift certain positions to dedicated funds to maintain baseline operations. Lawmakers asked for a follow‑up with precise staffing counts and historic fluctuations so they could better assess ongoing baseline needs.

Other items discussed included a $161,000 request for IT hardware, a $4.87 million proposed cash transfer in FY26, and requests tied to OITS and DHR consolidations. The governor recommended the department’s enhancements as presented; no formal committee vote took place at the hearing.

Rivera concluded by offering to provide a fact sheet and additional data on benefits levels, employer tax formulas and staffing counts upon request.