Indiana on pace to deplete jobless benefits in September

Indiana’s unemployment insurance trust fund will be depleted in September if Hoosiers continue seeking assistance for joblessness at the current pace due to the coronavirus pandemic, a state official says.

Posted: Aug 7, 2020 12:44 PM

INDIANAPOLIS (AP) — Indiana’s unemployment insurance trust fund will be depleted in September if Hoosiers continue seeking assistance for joblessness at the current pace due to the coronavirus pandemic, a state official says.

The fund, which provides jobless benefits for the unemployed, had about $886.8 million in early March, before the pandemic, according to data from the U.S. Department of Treasury. But the fund’s balance had fallen to $171.8 million as of Aug. 5, The Indianapolis Star reported.

The Indiana Department of Workforce Development projects the fund would become insolvent sometime in September because of the pace that the state is burning through the remaining money.

“We’ve only probably got a handful of weeks if we continue the current pace of payments,” said Josh Richardson, the state agency’s chief of staff.

Hoosiers have filed 948,000 new requests for unemployment insurance benefits over the course of about 10 weeks due to the economic fallout from the pandemic, according to a tally of initial claims by The Indianapolis Star. More than 200,000 people have continued to file for benefits after submitting an initial claim.

Because Indiana’s trust fund is financed by payroll taxes, money is consistently added to the fund. But those taxes haven't been enough to keep up with the unprecedented level of pandemic-related job losses.

The Treasury Department maintains Indiana’s unemployment insurance trust fund. There are no federal requirements for the number of funds a state should keep in its unemployment insurance trust fund.

When the fund is depleted, Indiana can borrow money from the federal government to cover unemployment insurance compensation.

“There’ll probably be a grace period where there’s not going to be any interest charged, probably for a couple of years,” said Christopher O’Leary, senior economist with the W.E. Upjohn Institute for Employment Research. “The state will have a chance to pay it (the loan) back without incurring any interest, so it’s just a very simple mechanism.”

Indiana has borrowed from the federal government before to cover unemployment insurance benefits. In the early 1980s, the state used a loan to cover an unemployment insurance fund deficit.

Indiana also depleted the fund during the Great Recession, when unemployment skyrocketed and demand for compensation exceeded reserves. The state borrowed upward of $2 billion to pay unemployment claims. It finished repaying the loan several years ago, according to published reports.

Indiana’s looming trust fund insolvency isn’t unique. Numerous other states have applied for federal advances to cover unemployment insurance benefits. According to Ernst & Young LLP, 13 states and jurisdictions applied to receive federal Title XII advances to cover unemployment insurance benefits by July 1. They are California, Massachusetts, Colorado, Delaware, Hawaii, Illinois, Kentucky, Minnesota, New York, Ohio, Texas, the Virgin Islands and West Virginia.

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Indiana Coronavirus Cases

Data is updated nightly.

Cases: 767409

Reported Deaths: 13980
CountyCasesDeaths
Marion1054251805
Lake569191030
Allen42938698
St. Joseph37313568
Hamilton37298426
Elkhart29749470
Tippecanoe23479230
Vanderburgh23201405
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Johnson18822392
Hendricks18072321
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Monroe12546178
Delaware11143198
Howard10672237
Kosciusko9777124
Hancock8740150
Bartholomew8262157
Warrick8069157
Floyd8027182
Grant7366181
Wayne7233201
Boone7184105
Morgan6910143
Marshall6332116
Dubois6274118
Cass6090111
Dearborn601278
Noble599290
Henry5947111
Jackson516377
Shelby510898
Lawrence4922127
Gibson462696
Montgomery458192
Clinton455255
DeKalb455285
Harrison453577
Whitley415745
Huntington415582
Steuben410660
Miami405573
Jasper401155
Knox388391
Putnam385062
Wabash369083
Adams352956
Ripley351271
Jefferson341886
White339654
Daviess3090100
Wells303581
Greene293485
Decatur292593
Fayette286364
Posey281735
Scott280058
LaGrange277572
Clay273348
Washington254037
Randolph247783
Jennings239449
Spencer238731
Fountain235250
Starke229859
Owen222659
Sullivan221343
Fulton208345
Jay202932
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Perry189739
Vermillion180844
Rush177527
Tipton172747
Franklin171935
Parke155216
Pike141734
Blackford138032
Pulaski123648
Newton123036
Benton109715
Brown106043
Crawford105616
Martin92515
Warren87715
Switzerland8348
Union73610
Ohio58111
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