Louisiana Will Soon Have to Borrow Money to Pay Unemployed
The picture we see for Louisiana's future is somewhat dismal if you consider the story we saw from LouisianaRadioNetwork.com and understand the complexities of what's actually going on.
It wasn't that long ago, pre-pandemic to be specific, when Louisiana's unemployment trusted fund was valued as the seventeenth strongest in America, but Louisiana Workforce Commission Director Ava Dejoie, says the pandemic economy has reeked havoc on it over the last several months.
Because of that, beginning on September 7th, Louisiana will need to borrow money from the Federal Government in order to continue paying constitutionally mandated benefits to Louisiana's unemployed.
Dejoie goes on to say that, to meet those obligations, Louisiana will be taking advantage of 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.
“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.
Now, here comes the dismal part. Did you see that part "we do have to pay the borrowed money back?" Add to it the part of the "solvency tax" and you can see the financial implications as plain as the nose on your face.
In my humble opinion, Louisiana has got to get back to work. The tax wells are running thin, tourism took a major hit this year and income taxes will have to run extremely less than previous years due to COVID and now we're having to borrow money to pay our unemployed. Payments from that reduced well.
Oh well, I guess we'll just have to cut corners to make ends meet. Maybe they'll need to stop working so hard making our roads such a joy to travel.