CT’s unemployment trust fund goes broke; employers on hook for millions in federal borrowing

The state’s unemployment insurance trust fund, which typically raises $800 million a year via employer taxes, ran out of money in August, forcing the state to borrow $402 million from the federal government to date, said Michael Lucente, the unemployment claims director of accounts within the state Department of Labor. That loan has helped pay out jobless benefits in recent months, but there’s only enough money left ‒ $4.2 million ‒ to last the rest of this week. That will force the state to borrow even more from the federal government. Connecticut has asked the feds for an additional $150 million in November and $250 million in December, but will only access the money when the trust fund is fully depleted, Lucente said. The federally borrowed money will be interest-free through the end of the year. But as of New Year’s Day, any outstanding balance will be subject to an interest rate of about 2.4%, largely because Connecticut failed to have a fully solvent unemployment trust fund in years past.


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