Louisiana to begin borrowing money for unemployment starting in September

Louisiana will need to begin borrowing money from the feds to fund our unemployment insurance program as of September 7^th.

Louisiana Workforce Commission Director Ava Dejoie says even if the state runs out of money in the trust fund we are constitutionally mandated to keep paying benefits, so to meet that obligation Louisiana will be taking advantage of a three month, zero-interest loans from the feds. Dejoie says over 20 states are already borrowing money from the feds to fund their unemployment programs.

But there will be penalties for the state unemployment trust fund running dry, and we do have to pay the borrowed money back.

“There is also a solvency tax when we go below the 100 million mark, and then a special assessment to repay the trust fund,” says Dejoie.

Louisiana’s unemployment trust fund was rated as the 17^th strongest in the nation before the pandemic struck, but Dejoie says it has been hammered by the pandemic economy.

“We have paid out 5.4 billion in combined state and federal benefits, and to put that in perspective in all of last year we paid out 153 million,” says Dejoie.

454,000 beneficiaries are currently receiving unemployment insurance payments from the state. All 454,000 will be eligible to receive the new 300 dollar federally enhanced unemployment assistance.