LA Unemployment Trust Fund past $1 billion mark, highest in 10 years
The trust fund that covers unemployment benefits for Louisiana workers is projected to reach $1.13 billion for the year ending August 31, 2020, marking its highest balance in a decade.
The state's Revenue Estimating Conference (REC) met Wednesday, September 25, 2019, to review the Louisiana Unemployment Insurance (UI) Trust Fund, which is managed by the Louisiana Workforce Commission (LWC). The fund, with a certified balance of $1,072,775,884 as of August 31, 2019, has gained $75.5 million since the last REC review in 2018, making it one of the strongest unemployment trust funds in the country.
"We are making great strides here in Louisiana. Our unemployment trust fund has seen unprecedented growth in recent years since 2012, when the fund was $795 million, while still maintaining the second-lowest taxable wage base on businesses in the country," said LWC Secretary Ava Dejoie. "This fund provides vital benefits to Louisiana workers in transition when they need it the most. At the same time, we make sure that every dollar that employers put into the fund is managed wisely and responsibly."
Businesses with workers in Louisiana pay into the fund, which in turn pays unemployment benefits to eligible claimants. The first $7,700 of an employee's paid wages are taxed for unemployment insurance in Louisiana, making it the second-lowest wage base in the country. Louisiana businesses also take advantage of the tenth-lowest average tax rate on total wages paid in the country, according to the latest figures from the U.S. Department of Labor (USDOL).
The Trust Fund has climbed to a level unseen since 2009 when it was $1,306,118,138. Since 2016, the Trust Fund has grown by nearly $142 million, and more than $276.7 million since 2012.
Numerous factors stimulate the UI Trust Fund's health, including low unemployment claim levels. The number of unemployed individuals from when Governor John Bel Edwards first took office has decreased. Preliminary seasonally adjusted data released on September 20 via the Bureau of Labor and Statistics, shows that the number of unemployed individuals stood at 90,173 for August 2019. Compared to the January 2016 figure of 130,726, there are now 40,553 fewer seasonally adjusted unemployed individuals. With fewer seasonally adjusted unemployed individuals, there are less individuals drawing unemployment benefits.
In addition, historic lows in UI claims have contributed to the UI Trust Fund's strength. In 2016, approximately 128,000 claims were filed, totaling $226,810,764. When compared to 2018, approximately 104,000 claims were filed, totaling $137,379,178. This year, from January 1 through August 31, only 66,485 claims have been filed in Louisiana.
No changes are planned to the current weekly amount of unemployment benefits, nor to the taxable wage base.
The trust fund's strength also means continued funding to the state's Incumbent Worker Training Program (IWTP), which provides funds to businesses offering training to existing employees who want to advance in their careers.
For information about the LWC, the UI division, IWTP, job fairs and more, visit www.laworks.net.
Contributed by The Louisiana Workforce Commission