Honadel Warns of Looming Unemployment Reserve Crisis

MacIver News Service | October 1, 2010

[Madison, Wisc…] State Representative Mark Honadel (R—South Milwaukee) is sounding the alarm, warning that that the state’s unemployment reserve indebtedness could lead to a new tax hike on Wisconsin employers.

“This is one of the most under-reported stories about Wisconsin’s dire fiscal condition,” said Honadel. “Anti-employer policies in Madison lead to high unemployment and leave a legacy where we have to pay for the sins of the past.”

Wisconsin’s unemployment reserve indebtedness is among the nation’s worst. According to data provided by the U.S. Department of Labor:

  • Despite an infusion of $134 million in Stimulus funds, Wisconsin’s Unemployment Reserve Fund ended 2009 with a deficit of nearly one billion dollars
  • Wisconsin has the 11th largest outstanding UI loan balance in the nation, up from 12th last quarter. Worse, the loan balance per covered employee is now the 5th largest in the country, up from 6th last quarter
  • As a percentage of total wages, Wisconsin’s loan is the fourth largest in the nation, up from fifth last quarter

“This level of indebtedness to the federal government is outrageous,” said Honadel. “I will work diligently to find ways to satisfy this loan without passing on a hefty new tax on employers here who have survived this recession.”

Unemployment Reserve Fund Balance and Outstanding Loans (Millions)

Source: Nonpartisan Legislative Fiscal Bureau

Year Total Receipts Benefit Payments Fund Balance Outstanding Debt
1982 223 688 -416 413
1983 298 519 -637 628
1984 565 347 419 534
1985 573 406 252 328
1986 648 352 43
1987 658 304 397
1988 615 266 746
1989 588 302 1,032
1990 513 341 1,203
1991 447 478 1,174
1992 448 438 1,184
1993 476 394 1,266
1994 505 377 1,394
1995 520 418 1,496
1996 517 471 1,542
1997 524 445 1,621
1998 524 452 1,693
1999 544 466 1,771
2000 559 515 1,815
2001 542 791 1,566
2002 684 949 1,301
2003 562 932 931
2004 644 795 777
2005 729 752 750
2006 723 753 717
2007 686 845 554
2008 656 996 187
2009 769 1,874 918 918
2010         (thru Aug) 725 975 -1,168 1,139