https://www.ocregister.com/2023/03/27/california-had-a-97-5-...
It sounds like it will be in the ballpark of costing businesses a couple of hundred dollars per year for each employee.
WHY was so much fraud possible during the pandemic (and possibly other times) in the first place. Is it possible this is because the departments responsible are normally understaffed and when handling a pandemic surge had zero ability to scale up? Is this a budget or law codification issue?
The article did mention a recent surplus, but didn't talk about any reasons it might have not not been allocated to paying off this federal loan. My cynic side suppositions it might be one of the only ways the state can effectively raise taxes overall.
Ah yes, of course! The solution to our dysfunctional bureaucracy is to... add more people to it!
[1] e.g., https://stanforddaily.com/2020/11/17/frankly-speaking-stanfo...
IMO, the Hoover Institution's writing is deeply misleading here: it implies a degree of hardship that $21 per employee does not seriously pose.
[1]: https://californiapayroll.com/blog/tax-alert-futa-credit-red...
Either way this is going to get paid back by CA taxpayers. So it seems like the main question here is whether the tax burden should fall on employers specifically or on the general fund.
It looks like corporate taxes run around 10% of CA tax revenues normally: https://ebudget.ca.gov/2022-23/pdf/BudgetSummary/RevenueEsti...
Given that, I think I'm ok with unemployment insurance costs falling mainly on employers.
I’m not even sure the state could pay it back directly, and if it could, it might require either cutting programs by large multiples of the amount needed or raising taxes by an amount significantly greater than the amount of the debt: Constitutional programmed baseline funding plus maintenance of effort requirements tied to federal funding plus Constitutionally programmed use of incremental revenue means that:
(1) the state (by this, I mean the executive and legislature working together; the people, of course, as the ultimate authority in the state can do what they want through initiative) can’t arbitrarily cut some large categories of spending,
(2) the cost of cutting other large categories of spending is greater than a $1 of federal funding dedicated to the same purpose for each dollar cut,
(3) even if the 2/3 majority necessary to raise taxes is marshalled, a substantial share of any new revenue from taxes would need to go to specified programs that get a share of incremental revenues, and
(4) total state spending (irrespective of revenue, and getting the required supermajority to raise taxes, etc.) is capped by the Gann Limit.
Letting the Fed tax employers directly avoids all of those constraints, even if it doesn’t optimally distribute the costs.