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Lawmakers press DEW on rebuilding UI trust fund and employer tax impact
Summary
Senators and representatives questioned whether the state's UI trust-fund rebuild—projected to require $946M–$970M by 2020 under statutory formulas—places undue burden on private employers, and asked how DEW accounts for private-sector risk and timing of collections.
Committee members pressed DEW leadership on the pace and fairness of the unemployment-insurance trust-fund rebuild during a performance review of Director Cheryl Stanton.
Lawmakers noted the April 30 trust-fund balance Stanton gave ($590,000,000) and asked how that figure relates to statutorily derived reserve targets. Stanton explained the statutory formula uses the last three worst recessions and a moving taxable-wage base; she said early rebuild estimates ranged from $785,000,000 to $834,000,000 and that projections for 2020 depend on wage-base growth and currently sit roughly between $946,000,000 and $970,000,000.
Committee members warned that rapid tax increases could strain private employers and raised the risk that closures of large private employers would sharply reduce future collections. Stanton said DEW consults each year with the Congressional Budget Office and Department of Labor when modeling benefit payouts and taxable-wage bases, and that DEW monitors claims weekly, noting current benefit payouts of "about 2.8 to 3,000,000 dollars a week." She told the committee she would provide updated figures after May 15 processing.
The discussion focused on the balance between rebuilding reserves to avoid future federal borrowing and avoiding overtaxing employers; Stanton urged continued legislative engagement around the annual September review that sets tax rates for the coming year.
