Unemployment Insurance Trust Funds: Long-standing State Financing Policies Have Increased Risk of Insolvency

This testimony discusses issues related to the financial condition of state unemployment insurance (UI) programs. This has been a topic of concern for the last 3 decades and has generated multiple studies, including several by GAO. The severity and length of the recent recession have resulted in the worst labor market conditions in the United States since at least the early 1980s, if not since the Great Depression of the 1930s, and placed a heavy demand on state UI trust funds. While preliminary data showed that the economy added the most jobs in any month in 3 years during March 2010, unemployment remains very high and has continued to increase in most states, suggesting that state UI programs will continue to face serious financial challenges for at least the near future. This testimony is based on our report, "Unemployment Insurance Trust Funds: Long-standing State Financing Policies Have Increased Risk of Insolvency".