Division Unemployment Insurance Funding Mechanism

Joint Budget Committee. The bill updates the funding mechanism for the division of unemployment insurance (division). The bill updates the name of the "employment and training technology fund" to the "unemployment insurance program support fund" and expands the use of the fund to include information technology and administrative costs of the division.

Current law specifies how the division must use the employer support surcharge to credit several funds. The bill modifies the disbursement to:

• 11% for the employment support fund (decreased from 35%);
• 54% for the unemployment insurance program support fund (increased from 32%);
• 20% for the workforce development fund (increased from 14%); and
• 15% for the benefit recovery fund (decreased from 19%).

The bill requires all money collected in each fund that is in excess of the maximum balance amounts authorized for the fund to be credited to the unemployment compensation fund. The bill ties the adjustments of the fund caps to the change in average weekly earnings instead of to the consumer price index. The bill also adjusts the cap for the unemployment insurance program support fund.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)