JACKSON, Miss. (WLBT) - Gov. Tate Reeves urged lawmakers to consider using some federal CARES Act money to restore the state’s unemployment insurance trust fund amid soaring unemployment claims and tens of millions in claims paid out thus far.
Reeves made the remarks after being asked about whether the state’s trust fund was in good shape after the impact from the coronavirus pandemic and subsequent stay-at-home orders.
“It’s not in as good a financial shape as it was 8 weeks ago," Reeves said. "220,000 Mississippians have filed for unemployment in the last eight weeks. That’s 220 times or 22,000 percent more than filed the week before we received our first case in Mississippi.”
A 3 On Your Side analysis of the current fund balance suggests it would take at least $23 million to restore the trust fund to pre-pandemic levels, though that figure is nearly four weeks old.
The process operates in much the same way as other states: employers pay into Mississippi’s unemployment trust fund, which then pays out unemployment benefits to those who file claims.
On January 1, 2020, the state’s unemployment trust fund had more than $710 million, according to an analysis of financial data from the U.S. Treasury Department.
“The good news is much like our rainy day fund, much like our capital expense fund, our unemployment trust fund was in great financial shape," Reeves said. "We were one of the top five states in the nation. Again, I go on national news and they ask me these questions and they’re just shocked to see the financial shape Mississippi was in before we got into this mess.”
The most recent ending balance shows the account with more than $683 million remaining, but that figure hasn’t been updated since April 16.
3 On Your Side looked at four months’ worth of transaction records from the U.S. Treasury Department to see what’s been coming out and going into this Magnolia State fund.
In March, nearly $8 million in benefits went out.
Benefit payments jumped significantly in April to nearly $26 million, but that figure is likely much higher because it only accounts for half the month.
It’s unclear whether the lack of recent updates is a state or federal problem; the U.S. Treasury website states the fund balance and transaction information is typically updated each week with the previous week’s numbers.
At the same time claims went out, fewer dollars went into the funds from employers, records show, likely because many of them have closed temporarily due to state and local restrictions.
State deposits dropped from $6 million in February to $750,000 in March.
For part of April, that figure rose slightly to $1.25 million.
Reeves said they’ve benefited from having extra money in the fund to weather tough times like the coronavirus pandemic, but hopes lawmakers will consider shoring the unemployment fund back up because he claims the end result could end up impacting local businesses.
“The unemployment trust fund is actually filled by taxes from small businesses. So if we don’t use CARES Act funds to refill it, then the taxes on small businesses are gonna go up to refill it, and this is the absolute worst time for our small businesses to get their taxes increased," Reeves said.
3 On Your Side reached out to the Mississippi Department of Employment Security to request an interview and financial information about the trust fund, including more recent numbers.
Dianne Bell, spokesperson for the agency, said they could not accommodate our interview request because of other interviews already scheduled for the day.
Our subsequent written questions and requests for financial information have not yet been answered.