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Unemployment Fund Crisis

Posted on April 7, 2021


Dear Friends & Neighbors,

Today House Minority Leader Candelora and business leaders across Connecticut held a press conference to discuss the looming crisis of the insolvent Unemployment Compensation Fund.

Connecticut is facing an Unemployment Compensation Trust Fund crisis not seen since the 2008 recession. This is the fund that provides unemployment payments to those who have lost their jobs, and which has been a lifeline for so many employees over the past year. While extended unemployment compensation has been picked up by the federal government, this state fund was the primary source of that money through most of 2020.

The state’s trust fund is supported by state unemployment taxes paid by employers. After the fund became insolvent last fall due to pandemic-related job loss, Connecticut borrowed $700 million from the federal government to replenish the fund – but the total debt is projected to exceed $1 billion. After the 2008 recession, Connecticut businesses were required to pay off about $1.2 billion in federal loans, which took six years and resulted in employers paying four times the federal unemployment taxes than businesses in neighboring states. It was our small businesses which were hit particularly hard – including those who are an important part of our communities.

We must not let history repeat itself. The projected $1+ billion in debt is an obligation that our state’s job creators will need to repay – with interest – unless we help.

Connecticut has been and will be receiving significant funding from the federal government for COVID-19 relief. We can use a portion of these funds to address the unemployment debt and prevent imposing an even greater burden on businesses already struggling from the pandemic.

Early in the legislative session, House Republicans put forth bills to proactively address this situation, such as HB 5607 An Act Concerning the Use of COVID-19 Relief Funds to Replenish the Unemployment Compensation Trust Fund, which I co-sponsored. In addition, HB 6555 An Act Concerning Legislative Oversight and Approval of COVID-19 Relief Funds provides much-needed legislative oversight of federal fund allocations which are currently being administered under the governor’s emergency powers. This approach will save jobs and help many of our struggling employers start to recover.

Connecticut’s recovery has been the main focus of House Republicans this session, including recovery of not only jobs but health and safety, schools and government transparency. For more information, visit