As state's unemployment trust fund dries up, lawmakers try to buy more time during special session
BATON ROUGE - Louisiana has burned through more than 95% of its unemployment trust fund and could start borrowing from the federal government in the next few days.
State lawmakers, meeting in their second special session this year, hope to find a solution that doesn't put more pressure on employers or their employees. Cutting unemployment benefits or requiring business owners to pay more in taxes are the extreme ends of the spectrum on responding to joblessness caused by COVID-19 restrictions, and neither is popular with lawmakers or with the public.
Senate President Page Cortez says lawmakers have a few options to buy more time to shore up the state's once-healthy unemployment trust fund. One of those is continuing the governor's suspension of a business solvency tax. They could also freeze unemployment benefits at current levels.
Cortez said those are important "so that the unemployed person out there understands they're not going to be diminished in their benefits and that the employer is not going to be bombarded with a huge assessment until such time that we can find and put more options on the table.”
During a short Revenue Estimating Conference meeting on Tuesday, lawmakers delayed approving the projected balance of the state's unemployment fund for next year. They will now meet no later than 10 days after the special session to do so, with the hope that members of the house and senate figure out a funding solution or solutions by that time.
"We have a very unusual circumstance that we're faced with right now. We have the pandemic that has dramatically drained the trust fund in an unprecedented way,” Commissioner of Administration Jay Dardenne said.
The state's unemployment trust fund started the year with a balance of more than $1 billion. Now less than $50 million is left, and it's all expected to run out by the week of Oct. 5.
Without legislative action during this special session, both worst-case scenarios come into play. Officials will have to cut unemployment benefits for 2021 from $247 per week to $221, which would be the lowest in the country. Business owners would also have to pay more unemployment taxes to make up for the difference.
Some lawmakers have suggested either using federal coronavirus aid or prior surpluses in the state's budget to help refill the trust fund.
The special session is slated to only last 30 days.