State unemployment fund could be depleted by October, GOP adds pressure to reopen economy

A new analysis shows Wisconsin’s unemployment insurance fund could be depleted by October if the state’s high rate of joblessness — caused by efforts to clamp down on the spread of COVID-19 — continues at its current pace. While the Department of Workforce Development, which is experiencing an unprecedented 300,000-plus claims per week, can borrow from the federal government if the Unemployment Insurance Trust Fund is exhausted, the news adds to mounting pressure from Republican lawmakers calling for a regional reopening of the state’s economy. What’s more, the state’s unemployment fund missed out on roughly $25 million in federal reimbursements due to the GOP-led Legislature’s delayed passage of a waiver of the state’s one-week waiting period unemployment benefits. The federal CARES Act, which went into effect in late March, provides reimbursements for states that do not have a one-week waiting period for unemployment benefits. Lawmakers on both sides of the aisle supported waiving the one-week waiting period, but the Republican-led Legislature did not meet to vote on the matter until mid-April, despite requests by Democrats and DWD to move quickly to waive the waiting period. “We knew that it needed to happen as soon as possible,” DWD spokesman Ben Jedd said. Ultimately there was a two-week gap between the passage of the CARES Act and the state waiver. On April 20, the U.S. Department of Labor notified the DWD that CARES Act reimbursements only apply after the one-week waiting period was waived.

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