(The Center Square) – Louisiana’s unemployment benefits fund is back in the black as the number of new claims is declining, officials reported Friday.
The unemployment insurance trust fund balance was $48 million, Louisiana Workforce Commission Secretary Ava Cates told the House and Senate budget committee. The balance previously dropped to zero amid unprecedented demand related to the COVID-19-driven economic downturn.
The state owes the federal government $184 million that state officials borrowed to pay legally required benefits, Cates said. Lawmakers plan to repay the federal debt with federal money from Louisiana’s $3 billion American Rescue Plan allocation.
The number of people making claims that would be paid out of the fund has fallen recently when compared with the worst stretch of the pandemic but remains significantly higher than pre-pandemic norms. New claims for unemployment during the week ending Saturday dropped to 5,573 from the previous week’s total of 5,976, according to the Workforce Commission. During the week ending May 30, 2020, 19,334 initial claims were filed.
The number of people with continuing claims is hovering around 50,000. Continued claims for last week decreased to 47,680 compared with 51,031 the week before. The four-week average of continued claims decreased to 50,248 from 51,333.
At roughly the same time last year, there were 301,598 continued claims, according to the Workforce Commission.
Cates said Gov. John Bel Edwards’ administration will make a “data-driven decision” in the coming weeks about whether Louisiana will opt out of federally enhanced unemployment benefits. Twenty-five states have announced plans to decline the additional $300 per week before the program’s scheduled end Sept. 6.
The administration has engaged a team of economists led by former Revenue Estimating Conference member Jim Richardson to study whether the enhanced benefits are on balance a positive or negative for the state. Many employers believe the benefits are enabling large numbers of potential employees to stay out of the workforce, creating a labor shortage, though many economists aren’t so sure.
“Since virtually all COVID restrictions have now been lifted, and there is incredible demand for labor, there’s diminishing justification for continuing a program that disincentivizes residents from seeking employment,” Andrew Fitzgerald, an official with the Baton Rouge Area Chamber, said in a prepared statement.
Edwards has said Louisiana is more dependent on tourism – a sector that is not close to recovering – than many of the states planning to opt out. Louisiana typically has an unemployment spike during the summer even during a normal year because fewer people want to vacation in the state during the hottest months, Cates said.
The availability and cost of child care also is a factor for many families. Edwards said Congress chose Sept. 6 as an end date to get families through the summer, suggesting Louisiana might consider opting out when schools reopen in August. He said the stimulative effect of the federal money on Louisiana’s economy also must be taken into account.