P. Coonan
2024-04-21 19:46:21 UTC
California is billions of dollars in debt to the federal government to pay
for its unemployment insurance trust at a time when the states expenses
far exceed its income.
The states government owes almost $21 billion to the federal government
at an interest rate of around 2.6%, according to the Treasury Department.
California borrowed the funds after a surge in unemployment which began
during the COVID-19 pandemic, which sent the states employment trust into
insolvency, according to The Los Angeles Times.
The states debts are adding more pressure to the California budget, which
is already in disarray, paying more than $650 million in interest on the
loan already, with another $50 million due in September, according to the
states Employment Development Department.
The state has resorted to hiking payroll taxes paid by employers and
increasing a surcharge on both state and federal payroll taxes to cover
the difference and pay off debts.
The unemployment rate remains high in California, measuring at 5.3% in
February, the highest out of all U.S. states, according to the Bureau of
Labor Statistics.
The huge debt accompanies a $73 billion budget deficit that the state is
expected to run in fiscal year 2024, following a projected $24 billion
decline in tax revenue as people flee the state. California Gov. Gavin
Newsom and the state legislature have so far only proposed $17.3 billion
in budget cuts, despite the states constitution requiring a balanced
budget.
The state accounts for 20% of the U.S. jobless claims, far greater than
the 11% share that California holds in the nations labor force, according
to the LA Times. Californians receiving unemployment payments also only
get 28% of the average wage in the state, which is lower than the national
average, and stay on benefits for significantly longer.
Californias economy has increasingly struggled over the past few years as
regulations, high taxes and poor governance dampen business activities.
The number of jobs in the state increased by 82,000 in the last year, as
of February, but added 61,100 government positions, and rampant retail
theft in big cities has raised costs and discouraged business operations.
Many states borrowed money from the federal government during the COVID-19
pandemic to pay for unemployment benefits, with California in particular
seeing its unemployment rate jump to 14.8%, the LA Times reported. Every
other state, excluding New York and California, has paid off its loans.
The California governors office did not immediately respond to a request
to comment from the Daily Caller News Foundation.
https://dailycaller.com/2024/04/18/california-debts-unemployment-benefits-
budget-deficit/
for its unemployment insurance trust at a time when the states expenses
far exceed its income.
The states government owes almost $21 billion to the federal government
at an interest rate of around 2.6%, according to the Treasury Department.
California borrowed the funds after a surge in unemployment which began
during the COVID-19 pandemic, which sent the states employment trust into
insolvency, according to The Los Angeles Times.
The states debts are adding more pressure to the California budget, which
is already in disarray, paying more than $650 million in interest on the
loan already, with another $50 million due in September, according to the
states Employment Development Department.
The state has resorted to hiking payroll taxes paid by employers and
increasing a surcharge on both state and federal payroll taxes to cover
the difference and pay off debts.
The unemployment rate remains high in California, measuring at 5.3% in
February, the highest out of all U.S. states, according to the Bureau of
Labor Statistics.
The huge debt accompanies a $73 billion budget deficit that the state is
expected to run in fiscal year 2024, following a projected $24 billion
decline in tax revenue as people flee the state. California Gov. Gavin
Newsom and the state legislature have so far only proposed $17.3 billion
in budget cuts, despite the states constitution requiring a balanced
budget.
The state accounts for 20% of the U.S. jobless claims, far greater than
the 11% share that California holds in the nations labor force, according
to the LA Times. Californians receiving unemployment payments also only
get 28% of the average wage in the state, which is lower than the national
average, and stay on benefits for significantly longer.
Californias economy has increasingly struggled over the past few years as
regulations, high taxes and poor governance dampen business activities.
The number of jobs in the state increased by 82,000 in the last year, as
of February, but added 61,100 government positions, and rampant retail
theft in big cities has raised costs and discouraged business operations.
Many states borrowed money from the federal government during the COVID-19
pandemic to pay for unemployment benefits, with California in particular
seeing its unemployment rate jump to 14.8%, the LA Times reported. Every
other state, excluding New York and California, has paid off its loans.
The California governors office did not immediately respond to a request
to comment from the Daily Caller News Foundation.
https://dailycaller.com/2024/04/18/california-debts-unemployment-benefits-
budget-deficit/