DENVER — Colorado's unemployment fund is expected to drop from $1.1 billion in March to an estimated deficit of $7 million by the end of June.
That's according to projection from the Joint Budget Committee (JBC) which also has the state's unemployment fund in the negative by $2.477 billion by June 2022.
"We actually borrow from federal accounts," said Colorado Department of Labor and Employment Senior Economist Ryan Gedney. "We set up an account and then we draw money from that account and pay in that way."
It's businesses, and not the state, that funds unemployment.
Business owners currently pay an unemployment fund premium based on the salaries it pays employees and a history of the number of layoffs that business has had over time.
To replenish the state's unemployment fund, those premiums will increase for business owners, as well as a surcharge for having the fund go into the negative.
The unemployment fund went into the negative in the 1980s and from 2010 to 2012.
In the 2010-2012 insolvency, the state received $1.1 billion in federal loans and $625 million in private bonds that were paid off by higher premiums and surcharges to business owners.
"If we didn't have the solvency surcharge, that just prolongs the amount of time it takes to bring the fund back up to solvency," said Gedney.
Representative Kim Ransom (R-Douglas County) posed a question to the JBC: what would happen if businesses opened tomorrow?
"There's probably a better way to say this, but the damage is already done in terms of how much we've already paid out," said Gedney. "We paid out $315 million in April alone, it's very likely we'll pay out $300 million again in May even if things opened up and everything got back to normal right now."
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