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Snapshot: A state-by-state look at solvency

Here’s where each of the Ninth District’s states stands with its unemployment insurance trust funds, its taxes, and its benefits

May 8, 2019

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Snapshot: A state-by-state look at solvency

Michigan

  • Trust fund: $4.2 billion, which is 104 percent of the solvency level, and the first time the fund has been solvent in five decades.
  • But achieved solvency by swapping federal debt, which counts against solvency, for private debt.
  • Like all states, paid more benefits and collected less taxes during bad times and reversed that in good times, but Michigan’s bad times lasted from 2001 to 2010, draining the trust fund.
  • Has cut taxes and benefits since the end of the Great Recession, with taxes in 2017 at 0.67 percent of total insured wages, the lowest in five decades.
  • Average unemployment check was 31 percent of the average paycheck, continuing a downward trend from the early 2000s, and the maximum duration of payments was cut from 26 weeks, which is the standard among most states, to 20 weeks.
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Minnesota

  • Trust fund: $1.6 billion, which is 94 percent of solvency. The fund was last solvent in 2015, following a 45-year stretch of insolvency.
  • Two recessions of the 2000s depleted the fund. To repay federal debts and replenish the fund, raised taxes to 1.35 percent of wages, the highest in seven decades. In 2017, taxes had fallen to 0.57 percent.
  • Kept benefit payments at about 42 percent of wages on average for four decades.
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Montana

  • Trust fund: $348.5 million, a healthy 151 percent of solvency.
  • Going into the Great Recession, Montana was one of the few states with solvent funds, and it was one of the few that didn’t need federal loans. The last loans were needed in the early 1980s.
  • Tax rate spiked to 1.23 percent of insured wages after the recession to replenish the fund but has dropped to 0.62 percent in 2017, the lowest in the history of the Montana unemployment insurance program.
  • Benefit payments averaged 44 percent of wages in 2017, part of an upward trend since the recession.
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North Dakota

  • Trust fund: $198 million, which is 111 percent of solvency.
  • Fund did worse during the recent slowdown in the oil industry than during the 2008-10 recession.
  • Adjusted for inflation, unemployment payouts in 2015 and 2016 were the largest in 20 years.
  • To replenish the fund, taxes rose to 1.17 percent of wages in 2017, the highest in 30 years.
  • Benefit payments shot past 50 percent in 2015 and 2016, influenced by the high wages jobless oil workers had earned.
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South Dakota

  • Trust fund: $127.7 million, which is 177 percent of solvency.
  • With South Dakota unemployment historically low, the three years with the biggest benefit payouts averaged 0.54 percent of insured wages, the nation’s lowest.
  • Depleted in 2010 for the first time, taxes rose to 0.75 percent of wages to repay federal loans and replenish the fund. By 2017, taxes dropped to 0.27 percent.
  • Benefit payments averaged 42 percent of wages in 2017, part of an upward trend since the late 1990s.
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Wisconsin

  • Trust fund: $1.7 billion, which is 89 percent of solvency.
  • Was solvent for more than a decade until the 2001 recession when high benefit payouts began, but taxes weren’t raised enough to cover costs.
  • In the aftermath, cranked taxes to 1.38 percent of wages to repay federal loans and then dropped taxes to 0.66 percent.
  • Benefit payments averaged 36 percent of wages in 2017, down from 41 percent in the 1970s through the 1990s.
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Main Article

Are Ninth District states’ unemployment trust funds ready for a downturn?

Low on funds, many borrowed from feds to pay benefits in the Great Recession

Unemployment insurance’s roots lie in Ninth District

Then FDR’s New Deal embraced the idea

A primer on unemployment insurance

How does it work? Who pays? Who benefits?

So you want to be an unemployment insurance nerd

Where and how to dive deeper into the data