Wisconsin unemployment fund could be depleted by October
Wisconsin could run out of money to pay unemployment benefits to workers who lost their jobs because of the coronavirus pandemic as early as October 11, according to a projection released Thursday by the state Department of Workforce Development.
That was the most bleak of three scenarios laid out by the department. The other two, which assume fewer unemployment payments, show the fund being depleted in January or September 2021.
If the state runs out of money, it could borrow from the federal government so the unemployed still receive benefit checks, said department spokesman Ben Jedd. The state’s projections don’t include future employer-paid unemployment insurance tax revenue, which would prolong the viability of the state fund.
As of Wednesday, Wisconsin’s unemployment insurance fund balance was just shy of $1.9 billion. But with more than half a million people filing for unemployment, causing the number of people out of work to reach levels not seen since the Great Depression in the 1930s, fears are rising that the state will run out of money to pay claims.
The average number of claims per week is nearly double what was seen during the Great Recession that began in December 2007, the Department of Workforce Development said.
“It is unknown if Wisconsin will continue to experience this high volume of claims and for how long this may occur,” the department said. “For this reason, it is difficult to project when or even if the (money) may exhaust and Wisconsin will need to borrow from the federal government in order to pay benefits, as it did during the Great Recession.”
The three scenarios laid out by the department assume a range of weekly benefits being paid from a low of 85,000 to a high of 255,000. The middle scenario assumed 170,000 weekly benefits.
The department has been overwhelmed with calls from people filing for unemployment and asking questions about their eligibility. Last week alone, the department said it received 4.7 million calls about unemployment benefits.
Thirty-six members of the Republican state Assembly sent department Secretary Caleb Frostman a letter earlier this week calling for the DWD to look at all possible options to process unemployment claims more quickly.
Gov. Tony Evers said Thursday on WTMJ radio that the state was adding people and “working hard” to process claims.
“We are anything but perfect,” Evers said. While some people have complained of waiting as long as six weeks to get their first check, Evers said the state was meeting the needs of the “vast majority” of filers.