Florida’s unemployment trust fund has slipped below the recommended level for periods of high-demand, meaning that if claims were to increase, it likely would be drained in less than a year.

If unemployment in the Sunshine State began to trend upward, the unemployment trust fund would last for a mere eight months, the Sun-Sentinel reported. If this were to happen, employers would likely see their unemployment tax rates rise, and the state may end up forced to turn to the federal government to bolster the fund, a costly option in the long run. However, there seems to be a consensus that despite the anemic unemployment trust fund, Florida won’t be raising state unemployment tax rates anytime soon.

State unemployment rate drops in July
For now though, the state’s unemployment rate seems to be trending downward. It dropped in July to a seasonally adjusted 5.4 percent from 5.6 percent in June, according to the state’s Department of Economic Opportunity. Florida’s unemployment rate remains similar to that of the nation as a whole. Of the 9.5 million strong workforce, 517,000 Floridians are currently jobless.

“Our work to grow the economy is paying off, and we will keep working to create new opportunities until every Floridian who wants a job can get one,” Gov. Rick Scott said in a statement.

Preference in Florida is to keep business’ taxes low
Part of that work is keeping taxes on Florida businesses low, which state official say promotes hiring, but is also the reason the unemployment trust fund isn’t growing much, and thus remains at a level considered the “red zone” by the Labor Department, according to the Sun-Sentinel. Rick McHugh, an unemployment insurance expert and lawyer for the National Employment Law Project, told the news outlet that the state’s unemployment program is “poorly financed” and called it “one of the strictest” in the U.S.

However, in Florida, state officials maintain that the program is designed to foster an environment that promotes hiring.

“The best assistance an unemployed person can receive is a new job,” Jesse Panuccio, executive director of the DEO, stated, according to the Sun-Sentinel. “In Florida, job growth is priority one, and that’s why we have pursued a low-tax, business-friendly climate.”

Unemployment trust fund financing likely to remain low
Still, the direction Florida has chosen to go in regard to its unemployment program has suppressed its trust fund to a limited supply. If the economic recovery were to stumble and unemployment claims ticked up, the fund would last for less than a year, according to its adequacy level of 0.66 out of 1.0, the news outlet reported. This means that it would last for 66 percent of the year, or about eight months. This places the fund in what a Labor Department chart refers to as the “red zone.”

However, there seems to be little evidence that employers will be subject to a state unemployment tax rate hike anytime soon. McHugh noted that prevailing political belief in Florida runs contrary to government assistance, meaning that there’s not much of a chance of the state making moves to reinforce its unemployment program in the near future.


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