Raimondo Needs to Tap Federal Stimulus to Shore Up Unemployment Insurance - Block
Ken Block, Guest MINDSETTER™
Raimondo Needs to Tap Federal Stimulus to Shore Up Unemployment Insurance - Block
The Rhode Island Public Expenditure Council (RIPEC), a nonprofit, nonpartisan organization, projects that Rhode Island’s unemployment insurance fund will be drained of more than half a billion dollars by early this fall.
The unemployment insurance program is an employer-funded system: Rhode Island’s businesses pay taxes into the fund which are then used to pay out unemployment insurance benefits to those who have lost their jobs.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe last time Rhode Island experienced a sharp economic downturn in 2008, it took Rhode Island’s businesses more than five years to rebuild the unemployment insurance fund. When recovering businesses must redirect funds to the unemployment insurance fund instead of into rebuilding the business, the recovery becomes longer and more difficult.
Our economy was shut down via one of Governor Raimondo’s emergency executive orders, which was justified. Our businesses were not the reason employees lost their jobs, those jobs were lost due to the virus.
The $1.25 billion in federal stimulus dollars provided to Rhode Island are earmarked for virus-related expenses. There is no greater example of a widely distributed, virus-related benefit than the unemployment insurance funds which provided a lifeline to many displaced Rhode Island workers as a result of the virus’ devastating impact on our economy.
If the unemployment insurance fund is not replenished with stimulus dollars, our already battered businesses will be forced to rebuild the fund at great cost, both monetary and also in terms of the negative impact due to the fact that the funds desperately needed to rebuild will instead be siphoned off into the unemployment insurance fund.
"Rhode Island is on track to borrow from the federal government to keep its unemployment insurance trust fund solvent for the second time in eleven years," said RIPEC President and CEO Michael DiBiase. "This level of frequency should be of concern to policymakers and taxpayers, as should the fact that the temporary disability insurance withholding rate is likely going to experience its second year-over-year increase."
One of the most important jobs everyone has in our state is to get our economy up and running and recovering as quickly and safely as possible. Using federal stimulus funds to replace depleted unemployment insurance funds is the right thing to do for employees, businesses and the economy in general.
Ken Block is the chairman of WatchdogRI.