January 19, 2021 - In this brief we assess how coronavirus disease 2019 (COVID-19) has affected renters and homeowners. We also provide an updated estimate of the total unpaid rental debt in California that has accumulated due to COVID-19.
Correction 1/19/21: Legend on Figure 3 corrected to match data.
March 23, 2020 - This post summarizes recent federal relief actions in the unemployment insurance program, discusses how these federal actions interact with current state programs, and highlight options the Legislature may want to pursue in responding to the ongoing crisis.
May 26, 2021 - The Governor’s 2021‑22 May Revision budget proposes $36 million General Fund to pay the first, partial payment on the state’s outstanding federal Unemployment Insurance (UI) loan and proposes to direct $1.1 billion in federal American Rescue Plan (ARP) Act funds to pay down a portion of the outstanding loan. In this post, we (1) provide an overview of the state’s UI system financing, (2) highlight how the pandemic affected the UI system, (3) look ahead to upcoming costs to employers and the state to repay the federal UI loan, and (4) assess the Governor’s proposed $1.1 billion pre-payment.
February 15, 2022 - In this post, we provide a projection of state and employer costs to repay the federal Unemployment Insurance loan under two economic scenarios, assess the effects of the Governor's proposed $3 billion General Fund payment toward the outstanding loan, and present an alternative to the Governor's proposal that could provide more immediate tax relief.
September 30, 2016 - Due to a variety of factors, the state's Unemployment Insurance (UI) trust fund exhausted its reserves in 2009, requiring the state to take on loans to continue the payment of benefits to unemployed workers. In this series of four online posts, we (1) examine the current condition of the UI trust fund and how it may change in the near future, (2) provide context on who pays UI taxes and how much they pay, (3) assess the extent to which the UI trust fund is prepared for the next economic downturn, and (4) look at potential steps the Legislature could take should it wish to increase reserves in the trust fund as a means to address the fiscal impacts of the next economic downturn.
Update 6/13/17:
Post 1 updated to reflect estimates in the 2017-18 May Revision.
Update 1/20/17:
Post 1 updated to reflect estimates in the 2017-18 Governor's Budget.
March 28, 2023 - Presented to: Assembly Budget Subcommittee No. 4 on State Administration
April 4, 2018 - The 2017-18 budget package authorized a plan to borrow $6 billion from the Pooled Money Investment Account—an account that is essentially the state’s checking account—to make a one-time supplemental payment to the California Public Employees' Retirement System. All funds that make pension payments will repay the loan over the next decade or so. Authorizing legislation gives the administration some discretion over how funds will repay the loan, but the statute includes a variety of repayment requirements. In our view, while the basic elements of the administration’s repayment plan are reasonable, we have serious concerns about some choices the administration made. To address these concerns, in this report, we recommend a modified repayment approach that would: (1) be consistent with the authorizing legislation, (2) allocate repayment costs across funds appropriately and publicly, and (3) provide incentives to create more cost-effective outcomes.
December 8, 2020 - In this post, we describe our most recent forecast for California Work Opportunity and Responsibility to Kids (CalWORKs) program costs and discuss recent caseload trends. With this post we intend to provide information but do not include any explicit recommendations to the Legislature. This post is part of our 2021-2022 Fiscal Outlook series of publications.
October 13, 2011 - Since 2008, the cost of providing unemployment insurance (UI) benefits in many states has exceeded available resources. As a result, by 2010 the UI funds in 32 states were insolvent, forcing those states to obtain loans from the federal government to continue payment of UI benefits. In this report, we conduct a comparative analysis of the UI programs in all 50 states and Washington D.C. to provide context for the Legislature in considering potential solutions to California's UI insolvency. Our analysis finds that California’s UI program pays comparatively lower weekly benefits, but pays these weekly benefits for a longer duration and to a relatively larger caseload. As a result, California has comparatively higher total program costs. To the extent the Legislature desires, California’s comparatively high cost structure could be mitigated by changing its UI eligibility and benefits duration policies. However, regardless of UI policies, California’s UI program is likely to have a higher UI cost structure than the average U.S. state as a result of its comparatively worse labor market.
October 20, 2010 -
California's Unemployment Insurance (UI) program became insolvent in 2009, ending that year with a shortfall of $6.2 billion. Absent corrective action, the fund deficit is projected to increase to approximately $20 billion at the end of 2011. This report looks at the history of the UI program, compares California's program to those in other states, examines different scenarios for addressing the insolvency, and makes recommendations to the Legislature for solving this difficult problem.
(Video Summary)
August 8, 2022 - California's Unemployment Insurance (UI) program provides wage replacement to unemployed workers. The program has faltered during recent downturns, causing hardship for workers and their families, holding back the state's economic recovery, and spurring frustration among Californians with their government. Recent failures trace back to the UI program's basic design, which results in more emphasis being placed on limiting fraud and business costs than making sure eligible workers get benefits quickly and easily. Although this emphasis is not new, the pandemic has highlighted the need to rebalance the UI program. We recommend about a dozen targeted changes to state practices to place a greater priority on getting payments to eligible unemployed workers.