Posted on 05/05/2023 8:57:33 PM PDT by T.B. Yoits
California borrowed approximately $20 billion from the federal government to cover unemployment benefits during the pandemic, and with Gov. Gavin Newsom’s recent decision to not pay it back, employers are now saddled with the expense, according to experts.
“The state should have taken care of the loans with the COVID money it received from the government in 2021,” Marc Joffe, policy analyst at the Cato Institute—a public policy think tank headquartered in Washington, D.C.—told The Epoch Times.
In the proposed 2023–2024 budget, $750 million was allocated to start paying down the loans, but Newsom made changes to the plan in January and withdrew the funding.
The decision leaves businesses in the state responsible for the loans—as mandated by federal regulations—so the federal unemployment tax rate of .6 percent is set to increase by .3 percent annually, starting in 2023, until the loan is extinguished.
“California is just not really an employer-friendly state,” Joffe said. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”
Twenty-two states borrowed money for unemployment insurance from the federal government during the pandemic, with all but four—California, Colorado, Connecticut, and New York—paying back their debts.
California owes the most, by far, with approximately $18.6 billion outstanding as of May 2, followed by New York’s $8 billion, Connecticut’s $187 million, and Colorado’s $77 million, according to U.S. Treasury Department data.
The discrepancy in amounts borrowed and owed by states lies in the different approaches to managing the pandemic, with California’s stricter lockdown causing unemployment to remain higher and longer, according to experts.
(Excerpt) Read more at theepochtimes.com ...
Can’t remember how it went but I think Trump denied Newsom/California Fed money because California is a sanctuary state. Once Biden came in Pelosi smircked,”Open Biden” and the money to Newsom was released?
I’m using questions because I’m just not sure. California was in debt pre 2020, had a surplus and now owes?
He was installed through cheating. Motor voter, ballot harvesting and fraud.
I am willing to be that this one thing may cause at least one business to close. The final straw.
I agree. They're targeting small businesses who can ill afford the unemployment insurance increase. The politicians in California forced the businesses to close and now pay more in unemployment insurance.
Yup and an interesting way to do it. Just accept the generosity of the federal government knowing you have the plan to default on that debt. I am sure hair sniffer will be more than happy to give them more “loans”
I guess every state in the union will be paying for those reparations now.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.