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At the request of the State of Vermont, NASWA conducted a survey of state UI directors regarding their efforts to improve UI trust funds solvency.

As of October 30, 2009, 48 states had responded to the survey: AL, AK, AR, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI and WY.

Of the 48 states responding to the survey, 11 indicated legislation addressing UI trust fund solvency had been introduced or passed in their state legislature during the 2009 legislative session. The majority of these states (9 of the 11) indicated the legislation addressing trust fund solvency included an increase in the state taxable wage base, while only 6 of these states reported the legislation would change the tax rates on employers.

State legislation also included a number of additional provisions intended to improve UI trust fund solvency such as increasing taxes on employers with poor experience, restricting benefits in some way and revising the state tax table trigger.

Legislative action was not required, however, for states to see some form of a UI tax increase in 2010. A total of 33 states will be seeing a UI tax increase on employers from 2009-2010. The majority of these increases are automatic - rate adjustments based on the level of reserves in a state's UI trust fund or taxable wage base increases indexed to a state's average wages per worker (17 states index their taxable wage base). Of these automatic increases, 8 states will adjust tax rates on employers due to a solvency or social cost adjustment already in state law.

The survey also sought to determine what measures states could implement that would increase a state's contribution levels without substantially diminishing the UI program's role as a prime economic stabilizer. These measures include freezing benefit level increases (for those states that index their benefits) in response to an adjustment to UI tax rates or a low level of reserves in the UI trust fund; the adoption of some form of comprehensive UI integrity legislation; and, the inclusion of a waiting period before first benefit payments.

For more information contact Ben Fendler at NASWA.