Edwards: Unemployment insurance trust fund slowly going insolvent

UPDATE: BATON ROUGE, La. (KLFY) — Gov. John Bel Edwards shared his concerns today over the state’s dwindling trust fund for unemployment insurance.

Specifically, Edwards said the trust fund stood at $1.1 billion before the COVID-19 outbreak. Today, he said that fund sits at $270 million. The taxes brought in during the last quarter, he said, were only $12 million — not enough to help replenish that fund.

Unless Congress steps in and helps replenish that fund, Edwards said there are only two other ways to do so. The state’s payroll taxes go into that fund, and those numbers are low because of layoffs. If the state has to borrow money from the federal government to replenish the fund, Edwards said costs will have to be passed onto employers in the form of a surcharge. The feds will require this surcharge as a way to guarantee the state can replay the loan.

Ultimately, Edwards said the most important thing the state needs is to get people back to work across the state. With the federal unemployment subsidy of $600 a month now expired, the state is now reinstituting the work search requirement for unemployment benefits.

Recipients must show at least three potential employers that they have applied to each week to continue receiving benefits. While there are some exceptions to the work search requirement — specifically for people who have COVID-19 or people who are in a business closed by COVID-19 reopening guidelines — Edwards said the work search requirement will help to get people back to work and take the strain off the trust fund.

Watch the full Aug. 6, 2020, press conference below: