According to the Government Accountability Office, outdated methods for assessing state needs each year “consistently left states underfunded, which contributed to them not being prepared for the surge in claims from the pandemic.”6 Likewise, Department of Labor officials have pointed out that the “long-term neglect to adequately fund the UI system” and the absence of a “dedicated funding stream f. [...] The opposite is true during recessions and the subsequent recovery years— the total allocations sent to states typically exceed the FUTA funds placed in the Administration Account for program man- agement. [...] As a result, the vast majority of states are seeing only a portion of the FUTA funds raised in the state for administration returned for that purpose. [...] The disconnect between the FUTA dollars raised and the amounts appropriated to states, coupled with the Administration Account balance requirement that redirects funds away from their initial purpose, reinforces the administrative underfunding. [...] This overhaul should include ending use of (1) the relevant statutory provisions that establish the 40 percent threshold requirement for the Administration Account and (2) national workload projections and the Resource Justification Model for determining the funding amounts distributed to states.
- Pages
- 19
- Published in
- United States of America
