Written by by Thomas Buckley at californiaglobe.com
Globa Culpa.
In October 2023, the Globe predicted the total EDD unemployment trust fund debt – principal and interest – would hit $20 billion. https://californiaglobe.com/fr/fed-unemployment-debt-to-hit-20-billion/
We were wrong – that didn’t happen until January 3, 2024. Even though six of those nine days were weekends or holidays and don’t really count, we were still just a bit off.
That being said, the EDD debt did hit $20 billion – PRINCIPAL ONLY – Monday. The EDD didn’t think that would happen until this coming December and somehow we don’t think the worst government agency in the history of state – including the DMV – will not be saying “oopsy.”
They certainly didn’t say “oops” in the bi-annual fund forecast report issued Wednesday – but they did modify their projected debt for December, though, pushing it up to $20.8 billion.
They certainly didn’t say “oops” in the bi-annual fund forecast report issued Wednesday – but they did modify their projected debt for December, though, pushing it up to $20.8 billion.
Considering that the EDD borrowed $26 million dollars-a-day so far this year and projects that it will cost that benefits paid will outstrip unemployment taxes paid by $1.7 billion, that projection is, well, wrong.
In his budget proposal, Gov. Gavin Newsom put aside $231 million general fund dollars to help out the EDD. He also directed that the Employment Training Fund “loan” the EDD another $100 million.
That $331 million dollars will make the September interest payment only and not touch the principal.
Last year, the EDD borrowed $300 million from the disability trust fund to pay the interest.
While there is no set payment schedule for the $20 billion – pay whenever you can, even better get employers pay it for you – the feds are sticklers for the interest.
In other words, think of your local bookie and Newsom is just paying the vig.