Back in October 2009, I wrote a piece examining the state of Colorado’s Unemployment Insurance Fund, and concluded that making long-term changes in eligibility in return for some short-term federal
crack cocaine cash was a terrible trade. There was a graph showing where our unemployment insurance fund was headed at the time, even before federal aid, and I use that term advisedly:
The “Claims Paid” is a rolling 12-month total, as are the contributions. Well, here’s that graph now:
Colorado Unemployment Insurance Fund
As you can see, the federal “aid” didn’t arrest the decline, it didn’t even hide the decline. At the beginning of 2010, Colorado’s bank balance hit $0.00, went past that, and had stayed there ever since. That $127 million that was so valuable and necessary funded the system for about 5 1/2 weeks at the peak of claims, about 8 weeks now.
These changes weren’t just an extension of benefits. Those extensions were supposed to be picked up by the feds. No, the $127 MM was in return for structural changes designed to permanently increase eligibility. Part of the justification for the increase was Mark Zandi’s claim that unemployment insurance payments had one of the highest multipliers of all forms of intervention. But it’s been pointed out that Zandi never explained how he got to that number, and the models used have never been subjected to outside scrutiny. Moody’s is no piker, but if policymakers are going to use their results, their models need to be subject to the same scrutiny that we give to global warming data. Cough.
The business contribution line, you’ll notice, has been rising. Well, that’s not because so many more people are employed now in Colorado than used to be. It’s because every May, CDLE is allowed to levy additional assessments on business when the fund falls below a certain level. Given that levels are those for a reservoir in Death Valley, the fund right now will meet any insolvency test you care to invent.
So now, when the federal government begins charging Colorado interest for the money loaned for the further benefits extensions, and when levels remain elevated at least in part because the terms for qualifying are more generous, Colorado is back asking (in the sense that the Stasi “asked” you not to make that joke, please) for even more money from businesses.
Ironically, the House sponsor of this financial wizardry was the man who now wants you to send him to Washington for more of the same – Rep. Sal Pace. Someone from our enterprising media, someone who does this sort of thing for a living, really ought to ask him about this, dontcha think?