The fund owes nearly $10 billion to the federal government — so much, the problem won’t fix itself even if disbursements fall to pre-recession levels, the Employment Development Department says.
Sharon Hilliard, center, chief deputy director of the California Employment Development Department, speaks at an Assembly Insurance Committee oversight hearing on the state’s unemployment insurance program.
Late payments, glitch-prone computers and swamped call centers aren’t the only problems bedeviling California’s unemployment insurance program.
The insurance fund that pays state jobless benefits — run by the Employment Development Department — owes nearly $10 billion to the federal government. That’s because the state has been paying far more in jobless benefits than it receives in employer-paid taxes, and the feds make up the difference.
“The whole system is really whacked out right now and needs a fix,” said Assemblyman Curt Hagman (R-Chino Hills). “Every time you peel off a layer of this EDD, there’s an additional problem waiting to be tackled.”
Hagman is vice chairman of the Assembly Insurance Committee, which last week held an oversight hearing into the EDD’s operations.
California has been wrestling with its unemployment insurance debt for almost five years, and now it projects that the debt won’t be repaid for at least a decade. That’s unless Gov. Jerry Brown’s administration and the Legislature come up with a new way to pay for the employer-financed program.
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