California’s unemployment insurance system is projected to have a $2 billion annual deficit over the next five years and an outstanding $20 billion federal loan balance, requiring a redesign according to a new report by the Legislative Analyst’s Office.
California ’s unemployment insurance financing system is facing big deficits, requiring a full "redesign," according to a new report from the state’s nonpartisan Legislative Analyst’s Office .The system, meant to be self-sufficient, has fallen short of covering annual benefit costs, resulting in a projected $2 billion annual deficit over the next five years and an outstanding $20 billion federal loan balance.
The report also recommends reworking how businesses are taxed for unemployment benefits to make the system simpler and encourage more hiring.To deal with the massive federal loan, the report suggests splitting the cost between employers and the state government, so that businesses aren’t stuck with all the debt."These are significant problems in isolation, let alone in combination," analysts wrote.
Unemployment Insurance California Deficit Redesign Legislative Analyst’S Office
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