By Clare S. Richie
Georgia’s unemployment trust fund is in the red. Since the end of 2009, the state has amassed a $635 million debt to the federal government so that it could provide unemployment benefits to Georgia’s growing number of laid-off workers.
Georgia’s first interest payment of $24 million is due this fall. Already cash-strapped, Georgia’s best option to make this interest payment, repay its loan and avoid federal tax increases on employers is federal relief. A poor alternative would be redirecting state funds from critical services such as education, health care or public safety in order to pay back the loan.
The unemployment trust fund is used to make weekly payments to eligible workers who are laid off due to no fault of their own. Employers contribute to the trust fund through federal and state unemployment insurance (UI) taxes. These contributions are used to build up the trust fund during strong economic times, creating a reserve that can be used to make payments during periods of high unemployment.
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