ugh. One more mess.
Add the insolvent and still hemorrhaging Unemployment Insurance Reserve Fund — and a looming $50 million in annual interest payments due the feds — to the list of economic challenges facing the Walker administration.
Due to the high number of applicants and a failure to salt away enough money during the good times, Wisconsin since February 2009 has been forced to borrow nearly $1.5 billion from the federal government to cover weekly benefits for the unemployed.
As a result, Wisconsin must start paying the feds in September. At current rates, that means the state will owe at least $50 million in annual interest payments alone. That comes on top of an estimated $3.3 billion deficit in the upcoming state budget.
Moreover, under the complicated federal rules, states are not allowed use general fund revenue to cover their unemployment fund borrowing shortfalls. That means employers who’ve been paying into the system may have to pick up the tab by paying in even more.
“The issue hasn’t gotten a lot of attention to this point,” says Kyle Christianson, a researcher with the Wisconsin Taxpayers Alliance. “But if history is predictive, there will need to be a compromise between business and labor to repay these loans. This means benefit cuts and tax increases are likely, even if only temporary, as was the case in the 1980s.”
Been saying this since the reserve fund started shrinking in 2000. Maximum weekly benefit rate has gone up in 20 years from $225 to $363 or 61%. The cap on payroll that is taxed has gone from $10,500 per year to $14,500 per year or 38%. Add in that we now pay FAR more often than before and the numbers get scary.
And how many empty businesses does West Bend currently have ? Where are the jobs if we’re supposed to be working ?
Our great leaders keep insisting that the government is the problem but how is removing government power over business going to make business regulate itself ? Outsourcing is too easy to easy, and you’re kidding yourself if you believe businesses & the ‘free market’ will correct itself. CEO’s and multi-millionaires could care less about their workers (hence dissolving unions) the only thing the ‘little guy’ can do to fight against heartless greedy corporations.
As someone who actually knows some CEOs and multi-millionaires, you have no idea what you are talking about. Grow up and run a business and you’ll know better.