Poll Position: How to repay state’s debt for jobless benefits?

Georgia’s government maintains a AAA credit rating and owes relatively little money to creditors. But we’ve run up one debt that is breathing down our necks: to the federal government, for unemployment benefits.

The recession walloped Georgia’s Unemployment Insurance Trust Fund, wiping out reserves of nearly $1.3 billion and leaving us to borrow from Washington to pay benefits to the jobless. The trust fund once totaled $2 billion, but it never quite refilled after legislators approved tax holidays totaling about $1.1 billion during Roy Barnes’ administration and somewhat smaller extensions during Sonny Perdue’s tenure.

How should Georgia pay down its federal debt for unemployment benefits?

  • Raise unemployment taxes (80 Votes)
  • Cut jobless benefits (48 Votes)
  • Some combination of 1-4 (43 Votes)
  • Sell bonds (to reduce interest costs) (20 Votes)
  • Use general revenues (12 Votes)
  • Something else (specify in comments) (10 Votes)

Total Voters: 213

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Today, we owe the feds $721 million. Starting next year, federal unemployment insurance taxes will rise each year until the debt is repaid. And with the state’s unemployment rate rising to 10.3 percent in September, payouts are going to continue for some time. Taxes are set at an average of $187 per worker per year now, and they are due to rise by $21 in 2012 and an additional $21 in 2013. That puts us “under the gun to get this paid back,” Georgia Labor Commissioner Mark Butler told the AJC Thursday.

To that end, Butler has proposed that the Legislature cut benefits for new applicants going forward. Checks for “top earners” would fall to $300 a week from $330 a week now, and the state could reduce the number of weeks it pays benefits. (Federal benefits currently are paid for 99 weeks.)

Alternatives for repaying the debt include raising unemployment taxes on businesses, selling bonds to take advantage of low interest rates (Georgia pays the feds a 4 percent rate) and devoting scarce general revenues. Which option is best? That’s this week’s Poll Position. Answer in the nearby poll, and offer an explanation — or other ideas — in the comments thread below.

– By Kyle Wingfield

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88 comments Add your comment

ByteMe

October 21st, 2011
6:25 am

Beginning in January 2007, the majority of Georgia’s
employers benefited from a $100 million unemployment
insurance tax cut. The average employer realized a 13
percent reduction in unemployment insurance costs.

And yet the Legislature was warned in 2006 that they needed to increase taxes to build up the unemployment trust fund. Good governance by Republicans? Nope. Blame it on Roy!!!

ByteMe

October 21st, 2011
6:25 am

“From each according to vulnerability, to each according to greed.”

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

October 21st, 2011
6:35 am

Sell Atlanta back to Washington DC where it belongs.

This would raise enough capital to pay off the debt, lower the area unemployment rate down to about 3.2%, raise the area SAT scores up to about third or fourth place in the nation and we could use the land for a brand new giant freeway.

See any downsides?

DeborahinAthens

October 21st, 2011
6:47 am

Raise unemployment taxes for employers. They have had a ” tax holiday” for years. Then, at the same time cut unemployment benefits. It’s harsh, but we can’t keep doing this.

Jefferson

October 21st, 2011
7:05 am

Re do what was undun.

Jefferson

October 21st, 2011
7:10 am

The GOP has not changed, they borrow and spend when in power. 21 mil in interest because they gave a funding break to the highest political contributors. Where is the conservitism ? Why is the solution to not hold up their end of the deal ?

jt

October 21st, 2011
7:13 am

Georgia would probably get a better deal by cutting the middle man out(washington) and dealing directly with China.They like our wood and/or eggs.
.
You could also raise the water/electricity rates(taxes) on all Federal land and Buildings in Georgia.

JohnnyReb

October 21st, 2011
7:23 am

When congress extended unemployment, did the feds fund the extension or was it an unfunded mandate on the states?

Acer706

October 21st, 2011
7:57 am

The FED funded it to be paid back plus points or taxes. Bookies best describe this as Juice…

JohnnyReb

October 21st, 2011
8:00 am

In other words, the Fed mandated; paid the money up front, but states have to pay it back. Is that correct?

Butch Cassidy

October 21st, 2011
8:03 am

For starters, Butler could eliminate the Alternative Base Period for benefits. In a nutshell, if an employee didn’t work long enough to qualify for benefits, but earned enough in income, they could still get UI under the ABP. So basically an employee can be fired after 1 month but still qualify. Between the ABP and the rubber stamps at many of the Career Centers, the state is paying out benefits that could go toward the re-payment of the loan.

Aquagirl

October 21st, 2011
8:03 am

Good thing the eeevil federal gub’mint bailed out our state. I’m sure the teanuts will send a thank-you note.

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
8:14 am

The folks who took our money should pay it back when they return to the workforce.

ByteMe

October 21st, 2011
8:21 am

In other words, the Fed mandated; paid the money up front, but states have to pay it back. Is that correct?

My understanding is that “no, this is not correct.” States are mandated to pick up a certain amount (the first 26 weeks, and it’s been that way a while) and the Feds are paying for up to 99 weeks now (to expire on Nov 30). The states typically run out of money when unemployment is higher, because they don’t like to fund for that.

HDB

October 21st, 2011
8:31 am

Lil’ Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
8:14 am
“The folks who took our money should pay it back when they return to the workforce.”

They DO….it’s called TAXES!!

If you want to really solve the problem with unemployment, link UI benefits to job retraining and education. You can adjust a worker’s skill set to make him more attractive to be hired, pay the benefits while being retrained….and cut down on the length of time a worker is unemployed……

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
8:35 am

They DO….it’s called TAXES!!
————————-

They’re not paying any more than those who didn’t take our money. They took something that didn’t belong to them and need to pay it back.

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
8:37 am

Some of these unemployed people could have had jobs had Obozo not sent half a billion dollars to an electric car company that then offshored the work to Finland.

Heckuva job, Obozo!

Jack

October 21st, 2011
8:38 am

A number of opinions indicate a wish to increase employers’ tax to cover the loan payback. A number of employers pay into the fund and never have a claim against them: that money is used to pay unemployment benefits to those that worked for someone else. Some call the employers’ DOL tax a contribution; it’s not a contribution, it’s a tax. Also, the feds collect .8% on the first $7000 (now .6% for 6 months) of all wages and that’s supposed to be a hedge against a state’s short-fall in funds. So, I’m wondering why it’s called a loan to the states.

carlosgvv

October 21st, 2011
8:39 am

As usual, incompetent leadership has painted Georgia into another corner and, one way or another, the poor and/or unemployed will suffer for the actions of our mediocre leaders.

JDW

October 21st, 2011
8:39 am

@Kyle, more Repugnican folly coming home to roost. They need to bite the bullet and raise unemployment taxes on businesses to a level that supports the program and selling bonds to take advantage of low interest rates that can be paid when (if) this state ever creates jobs again.

Did you know that In 2008, however, Georgia’s unemployment rate climbed above the national average and has remained higher since? According to the Bureau of Labor Statistics that also happened for most of 2005/2006. Before that you have to go back to 1989 when it was higher for the first half of the year and before that you have to go back to 1976. In August our rate was ranked 42 our of 50 states. December 2000 was the lowest rate in history at 3.3% while December 2010 was the highest at 10.4%…what was it that happened in January 2000 that could have made a difference? :roll:

Over the last 10 years we have gone from near the top of the national economy to near the bottom. Instead of spending time thinking about cutting unemployment benefits from $300 to $330 a week to save money maybe our Repugnican leaders should take a long hard look in the mirror and figure out how to fix their mess.

JDW

October 21st, 2011
8:49 am

@Jack…”A number of employers pay into the fund and never have a claim against them: that money is used to pay unemployment benefits to those that worked for someone else.”

The rates are set by the number of claims, more claims equals higher rates. It is unreasonable to assume that any employer of any size will not have a claim, they will.

You are correct in that the “feds collect .8% on the first $7000 (now .6% for 6 months) of all wages and that’s supposed to be a hedge against a state’s short-fall in funds.” The problem was that it was not enough to cover the volume of claims…bad underwriting/legislating.

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:06 am

Why are Democrats blocking the jobs bill?
———————-

Democrats block jobs bill over spending cuts

WASHINGTON — The Senate has blocked jobs legislation that would prevent the government from withholding 3 percent of payments to government contractors.

The legislation failed to get the 60 votes needed to end a Democratic filibuster late Thursday. Many Democrats and President Barack Obama support the idea.

Acer706

October 21st, 2011
9:14 am

Solution: Economics is the solution for EVERYTHING.
EVERYTHING is controlled by INCENTIVES!!!!!

Federal Government forgive or for-bear interest on tax-revenues returned to State/Local Govts intended for economic progress. Successful ventures through State/Local Govts with proof are subject to taxation on the surplus, only. Failed projects simply hold those advocates accountable and responsible for failing…

What if GA stops making payments? What would Washington argue? Advantage GA… for sure.

JDW

October 21st, 2011
9:15 am

@Barry…”Why are Democrats blocking the jobs bill?”

Still in your stupor I see…Three Democrats abandoned Obama on the vote and joined with ALL 47 Repugincans for a 50-50 vote to break the Repugnican fillabuster…and in your world this constites Democrats blocking the bill… :shock:

Bart Abel

October 21st, 2011
9:19 am

RE: “legislators approved tax holidays totaling about $1.1 billion during Roy Barnes’ administration and somewhat smaller extensions during Sonny Perdue’s tenure.”

Roy Barnes hasn’t been the Governor for almost a decade. Governor Perdue and Deal and the Republican state legislature has had plenty of time and opportunity to right this wrong, but they chose not to. Republicans under the Gold Dome also had something that Governor Barnes didn’t have…an economic downtown that exploded the deficits in the unemployment trust fund.

Unemployment in Georgia is over ten percent higher than the national average (A state with 10 percent unemployment has 11 percent more people unemployed than a state with 9 percent unemployed). This tax should have been reinstated long ago. Unemployment benefits go right back into the economy and employers would be wise, for the sake of the Georgia economy, to agree to it.

This tax holiday is another example of Georgia governors and legislators continuing to cater to the few at the expense of the many (and at the expense of the businesses they think they’re helping). In addition, the notion that Georgia is borrowing so much money from the federal government while always crying that the federal government should get off their backs strikes me as a sad irony.

There are numerous applicants for each job opening out there. Millions are unemployed through no fault of their own. We need to quit demonizing the unemployed and continue to pay them adequate benefits. If things in Europe hit the fan soon, then it might be you or me or a loved one one day soon.

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:20 am

Your reading comprehension is quite weak, JDW.

D-E-M-O-C-R-A-T filibuster.

http://www.miamiherald.com/2011/10/20/2464326/obama-would-veto-gop-jobs-bill.html

Why are Democrats blocking the jobs bill?

ByteMe

October 21st, 2011
9:21 am

Since when is anything concerning withholding money to government contractors a “jobs bill”?? What nonsense.

ByteMe

October 21st, 2011
9:23 am

What if GA stops making payments? What would Washington argue?

Nearly half the Georgia state-wide education budget comes from Washington. That’s a LOT bigger a piece of pie than the unemployment bill. Advantage Washington.

Acer706

October 21st, 2011
9:28 am

Do you actually think they would cut Education funding? To an entire state before hitting the campaign trail? Yeah right!

I’d call that bluff all day. I bet Education would not even be brought up.

Uncle Jed

October 21st, 2011
9:32 am

Just pay them back a percentage, like GM did. Or claim a “Solyndra” do-over. Better yet, pay them off in peanuts and kudzu.

JDW

October 21st, 2011
9:36 am

@Barry…wow you really are in a stupor. The article you cite from the Miami Herald is not a jobs bill. It apparently cuts domestic spending by $30 billion and allows a witholding for taxes deduction on federal contractors. How that would create jobs is a mystery.

The real jobs bill was blocked by all 47 Repugnicans last night.

Uncle Jed

October 21st, 2011
9:39 am

One dead dictator does not equate to universal approval…

Gallup has Obogey at 39% approve and a record 54% disapprove

President Barack Obama averaged 41% job approval during his 11th quarter in office, down six percentage points from his 10th quarter average and his lowest to date. Obama’s most recent quarterly average ranks in the bottom fifth of all 262 presidential quarters Gallup has measured since 1945.

And another thing. Occupy this:
Americans are more than twice as likely to blame the federal government in Washington (64%) for the economic problems facing the United States as they are the financial institutions on Wall Street (30%). [some would have you believe the rag-tag hippie wannabes represent America at large]

http://www.gallup.com/home.aspx

Uncle Jed

October 21st, 2011
9:42 am

The real jobs bill was blocked by all 47 Repugnicans last night.
++++++++++++++++++

“Real jobs bill”, thy name shall be Son of Stimulus

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:44 am

JDW, I can’t blame you for being embarrassed by getting caught not knowing the facts. And it’s not surprising that you were ignorant of this Republican jobs bill to put more money in the hands of job creators–the media doesn’t have any interest in reporting alternatives to your clown prince’s failed bill.

Why Democrats are filibustering efforts to create jobs is still a mystery. Obozo supports this change. Except when it’s proposed by Republicans.

Why is Obozo playing politics with the Republican jobs bill?

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:44 am

Obozo’s “jobs” bill failed because it was so partisan and ineffective that it couldn’t even get all the Democrats to support it.

JDW

October 21st, 2011
9:45 am

@Uncle Jed…”“Real jobs bill”, thy name shall be Son of Stimulus”

The Facts: A more accurate jobs count may come from the nonpartisan Congressional Budget Office, which estimates the American Recovery and Reinvestment Act, also known as the stimulus bill, “increased the number of people employed by between 1.4 million and 3.3 million” in the second quarter of 2010 alone. The budget office also states that well over half a million jobs were funded in each of the other three quarters of 2010.

http://politicalticker.blogs.cnn.com/2011/09/13/fact-check-did-the-stimulus-create-zero-jobs/

May I have another please?

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:47 am

Nine. Percent. Unemployment.

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
9:47 am

Unemployment was LOWER before your clown prince blew $800 billion borrowed from China.

JDW

October 21st, 2011
9:49 am

@Barry…”Why Democrats are filibustering efforts to create jobs is still a mystery. Obozo supports this change. Except when it’s proposed by Republicans.”

Because the want to cut real programs that benefit real people to fund something that while it might be a good idea is a bad trade as currently written.

“And it’s not surprising that you were ignorant of this Republican jobs bill to put more money in the hands of job creators”

More myths and bad info…read Bloomberg maybe you will listen to the voice of reason from the right…

http://www.bloomberg.com/news/2011-10-07/atlas-should-shrug-at-u-s-senate-proposal-for-millionaires-surtax-view.html

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
10:00 am

Typical hypocrisy from you, JDW. When Democrats block a jobs bill, it’s because of principled opposition. When Republicans block something, it’s politics.

It’s no wonder your clown prince is failing and taking a whole bunch of Americans down with him…he’s got sheeple like you cheerleading him on. This type of behavior is normally exhibited in only one species…lemmings.

Acer706

October 21st, 2011
10:07 am

I know what would be brought up…

“$700BILLION WAS YOUR FAIR SHARE, WHERE IS MINE?”

ByteMe

October 21st, 2011
10:18 am

Teacher work day at the middle school, Lil Barry? Or does your Mom not know you’re home?

Lil' Barry Bailout (Unexpectedly Revised Downward)

October 21st, 2011
10:27 am

I’m on call…all week. Pretty cool–I keep making my outrageous salary, and I don’t have to do a thing unless the phone rings (it hasn’t).

Uncle Jed

October 21st, 2011
10:31 am

which estimates the American Recovery and Reinvestment Act, also known as the stimulus bill, “increased the number of people employed by between 1.4 million and 3.3 million”
++++++++++++++++++

My cat could spew out a more accurate guesstimate than the CBO.

Aquagirl

October 21st, 2011
10:42 am

this Republican jobs bill to put more money in the hands of job creators

Kyle is complaining we put more money in the hands of job creators, and now we have to borrow from the Feds. Maybe you should direct your whine in his direction.

Oh, wait, he’s not a Democrat, commence the Con Twist to find a more palatable target.

Chelisa

October 21st, 2011
10:54 am

Cut the weekly welfare benefit, shorten the eligibility time, and require the recipients to repay a portion of their welfare once they go back to work.

We’ll never appreciably knock down the unemployment rate until we stop paying people to sit on their butts and do nothing.

Uncle Jed

October 21st, 2011
10:58 am

We’ll never appreciably knock down the unemployment rate until we stop paying people to sit on their butts and do nothing.
++++++++++++++++++++++

Yep.

Karl Marx

October 21st, 2011
11:06 am

Really Chelisa? You’ll never appreciably knock down the unemployment rate until companies who are reporting record profits actually start hiring again rather than shipping jobs overseas for slave labor rates. They shpuld be made to pay those benefits unless they actually start hiring. Now lets all go out and buy a new electric car our taxes paid to outsource overseas to be built.

Acer706

October 21st, 2011
11:09 am

Drug tests to qualify?

Aquagirl

October 21st, 2011
11:27 am

Chelisa, if you are so slothful you think it would be fun to be unemployed, that sounds like a personal problem. Believe it or not, the rest of the world does not share your barely-disguised desire.