California is the only state that hasn’t repaid its pandemic-era unemployment loans, with debt projected to top $23B.
By Catholics for Catholics
California’s swelling unemployment insurance debt is a major problem, but a House Republican is moving in to do something about it, contending that employers are being stuck with the bill as the state refuses to pay its debt.
Rep. Vince Fong, R-Calif., is scheduled to introduce legislation on Tuesday that would compel California to pay its unsettled $21 billion loan to the federal government before spending federal money on other programs, according to a story by Fox News.
The state would have to employ eligible federal funds toward repayment within five business days of the money becoming available, according to Fong’s bill. If it transgresses that provision, the state would have to pay the full amount of misused funds to the federal government.
According to Fox News, California is the only state that has not repaid its loans for a COVID-19-era program that helped states finance a surge in claims for unemployment benefits with federal money. In its place, the state’s federal unemployment debt continues to rise and is expected to top $23 billion by the end of the year, according to CalMatters.
The inability to pay off the gargantuan debt has been harmful to the state’s employers, who have been compelled to help repay the loans through automatic tax hikes, Fong contends. Businesses were forced to pay an additional $42 per employee on their federal payroll taxes this year to help service the unpaid debt, KCRA reported.
A former state legislator, Fong linked the enormous unemployment debt to more expanding concerns about the Golden State’s budgeting decisions.
“Fraud and mismanagement aren’t isolated incidents in Gavin Newsom’s California — they’ve become systemic failures with real consequences,” Fong said in a statement. “Rather than using the state’s past $98 billion budget surplus to pay down that debt, Sacramento shifted the burden onto employers through automatic payroll tax hikes. Enough is enough.”
“My legislation restores accountability, protects our local small businesses and farmers, and prevents California job creators from being punished for Sacramento’s negligence,” Fong added.
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