The Unemployment Trust Fund (UTF):
State Insolvency and Federal Loans to States
Julie M. Whittaker
Specialist in Income Security
May 5, 2014
The House Ways and Means Committee is making available this version of this Congressional Research Service
(CRS) report, with the cover date shown, for inclusion in its 2014 Green Book website. CRS works exclusively
for the United States Congress, providing policy and legal analysis to Committees and Members of both the
House and Senate, regardless of party affiliation.
Congressional Research Service
RS22954

The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States

Summary
Although states have a great deal of autonomy in how they establish and run their unemployment
insurance programs, federal law requires states to promptly pay Unemployment Compensation
(UC) benefits as provided under state law. During some recessions, current taxes and reserve
balances may be insufficient to cover state obligations for UC benefits. States may borrow funds
from the federal loan account within the Unemployment Trust Fund (UTF) to meet UC benefit
obligations.
This report summarizes how insolvent states may borrow funds from the UTF loan account to
meet their UC benefit obligations. It includes the manner in which states must repay federal UTF
loans. It also provides details on how the UTF loans may trigger potential interest accrual and
explains the timetable for increased net Federal Unemployment Taxes Act (FUTA) taxes if the
funds are not repaid promptly.
Outstanding loans listed by state may be found at the Department of Labor’s website:
http://www.workforcesecurity.doleta.gov/unemploy/budget.asp#tfloans.
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The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States

Unemployment Compensation, Unemployment
Taxes, and a State’s Obligation to Pay Benefits
Unemployment Compensation (UC) is a joint federal-state program financed by federal payroll
taxes under the Federal Unemployment Tax Act1 (FUTA) and by state payroll taxes under State
Unemployment Tax Acts (SUTA).2 These revenues are deposited into the appropriate account
within the federal Unemployment Trust Fund (UTF).
Originally, the intent of the UC program, among other things, was to help counter economic
fluctuations such as recessions.3 This intent is reflected in the current UC program’s funding and
benefit structure. When the economy grows, UC program revenue rises through increased tax
revenues. At the same time UC program spending falls as fewer workers are unemployed. The
effect of collecting more taxes while decreasing spending on benefits dampens demand in the
economy. This also creates a surplus of funds or a “reserve fund” for the UC program to draw
upon during a recession. These reserve balances are credited in the state’s account within the
UTF. In an economic slowdown or recession, UC tax revenue falls and UC program spending
rises as more workers lose their jobs and receive UC benefits. The increased amount of UC
payments to unemployed workers dampens the economic effect of lost earnings by injecting
additional funds into the economy.
State and Federal Unemployment Taxes
State Unemployment Taxes (SUTA)
States levy their own payroll taxes (SUTA) on employers to fund regular UC benefits and the
state share (50%) of the Extended Benefit (EB) program.4 Federal laws and regulations provide
broad guidelines for these state taxes. Each states deposit its SUTA revenue into its account
within the UTF.
UC benefits are financed by SUTA revenue. Generally, when economic activity is increasing and
robust, SUTA revenues are greater than states’ UC expenditures and the states’ reserves within the
UTF grow. This trend is reversed during economic recessions and the early economic recovery
period where the state’s reserves are drawn down and new SUTA revenues do not always make
up a shortfall.

1 Sections 3301-3311 of the Internal Revenue Code of 1986 (26 U.S.C. §§3301-33011).
2 The underlying framework of the UC program is contained in the Social Security Act (SSA). Title III of the SSA
authorizes grants to states for the administration of state UC laws, Title IX authorizes the various components of the
federal Unemployment Trust Fund (UTF), and Title XII authorizes advances or loans to insolvent state UC programs.
3 See, for example, President Franklin Roosevelt’s remarks at the signing of the Social Security Act at
http://www.ssa.gov/history/fdrstmts.html#signing.
4 The Extended Benefit (EB) program was established by the Federal-State Extended Unemployment Compensation
Act of 1970 (EUCA), P.L. 91-373 (26 U.S.C. 3304, note). EUCA may extend receipt of unemployment benefits by 13
or 20 weeks at the state level if certain economic situations exist within the state. For details, see CRS Report
RL33362, Unemployment Insurance: Programs and Benefits, by Julie M. Whittaker and Katelin P. Isaacs.
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The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States

If the recession is deep enough and if SUTA revenue is inadequate for long periods of time, states
may have insufficient funds to pay for UC benefits. States are required by federal law to pay these
benefits. Federal law provides a loan mechanism within the UTF framework that an insolvent
state may opt to use in order to meet its UC benefit payment obligations.5 States must pay back
these loans. If they are not paid back quickly (depending on the timing of the beginning of the
loan period), states may face interest charges and the states’ employers may face increased net
FUTA rates until the loans are repaid.
In the years immediately following the most recent recession, many states had insufficient SUTA
revenue and UTF account balances to pay UC benefits.
Federal Unemployment Taxes (FUTA)
All FUTA revenue is deposited into the Employment Security Administration Account (ESAA)
within the UTF. Federal unemployment taxes pay for the federal share of EB (50%) and
administrative grants to the states. Additionally, through the federal loan account within the UTF,
FUTA funds may be loaned to insolvent states to assist the payment of the states’ UC obligations.
Net FUTA Rate Is 0.6%
FUTA imposes a 6.0% gross federal unemployment tax rate on the first $7,000 paid annually by
employers to each employee. Employers in states with programs approved by the U.S. Labor
Secretary and with no outstanding federal loans may credit up to 5.4 percentage points of state
unemployment taxes paid against the 6.0% tax rate, making the minimum net federal
unemployment tax rate 0.6%.6
Since most employees earn more than the $7,000 taxable wage ceiling in a calendar year, the
FUTA tax typically is $42 per worker per year ($7,000 x 0.6%), or just over two cents per hour
for a full-time year-round worker.7
States Required to Pay UC Benefits
States have a great deal of autonomy in how they establish and run their unemployment insurance
programs. However, the framework established by federal laws is clear and requires states to
promptly pay the UC benefits as provided under state law.8

5 Federal unemployment compensation law does not restrict the states from using loan resources outside of the UTF.
Depending on state law, states may have other funding measures available and may be able to use funds from outside
of the UTF to pay the benefits (such as issuing bonds).
6 Section 3304 of FUTA (26 U.S.C. §3304) allows up to 5.4% credit for actual state unemployment taxes paid.
Additionally, under Section 3303 of FUTA (26 U.S.C. §3303), employers that paid less than a 5.4% rate in state
unemployment taxes are eligible for an additional state tax credit of up to 5.4%. The total state tax credit (actual and
additional) on federal unemployment tax calculation is restricted to be no more than 5.4%. Thus, all employers in states
with approved UC programs receive a 5.4% credit in the calculation of FUTA, even if the employer paid less than a
5.4% rate in state unemployment taxes.
7 Assuming a full-time year-round worker works 52 weeks/year and 40 hours/week (for 2080 hours/year),
42/2080=$0.0202.
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In budgetary terms, UC benefits are an entitlement (although the program is financed by a
dedicated tax imposed on employers and not by general revenues). Thus, even if a recession hits a
given state and as a result that state’s trust account is depleted, the state remains legally required
to continue paying benefits. To do so, the state might borrow money either from the dedicated
loan account9 within the UTF or from outside sources.
If the state chooses to borrow funds from the UTF, not only will the state be required to continue
paying benefits, it will also be required to repay the funds (plus any interest due) it has borrowed
from the federal loan account within a few years. Such states may need to raise taxes on their
employers or reduce UC benefit levels, actions that dampen economic growth, job creation, and
consumer demand. In short, states have strong incentives to keep adequate funds in their trust
fund accounts.
If the state borrows from sources outside the UTF, the state would not be subject to the loan
restrictions described below; instead, they would be subject to the terms within that outside loan
agreement which might offer a different (more favorable) interest rate or repayment schedule but
may include fees to establish the loan.
Funds Available for Loans to States Within the UTF
The Federal Unemployment Account (FUA) is the federal loan account within the UTF. There are
two automatic funding sources available within the FUA. Additionally, the FUA may borrow
funds from other federal accounts within the UTF or (if needed) from the General Fund of the
U.S. Treasury. Since FY2009, the FUA has had to borrow funds from the U.S. Treasury in order
to finance loans to the state accounts.
1. Excess revenue from Extended Unemployment Compensation Account (EUCA)
is deposited into the FUA.10 In FY2013, the EUCA net balance was an estimated
shortfall of (negative) $18.8 billion. Thus, no EUCA funds were distributed to the
FUA in FY2013.
2. Revenue from additional FUTA taxes paid by employers when a reduced credit
against federal unemployment taxes exists because the state has an outstanding
unpaid loan from FUA is deposited into the FUA. (See the discussion below on
“Federal Tax Increases on Outstanding Loans Through Credit Reductions” for a
more detailed explanation of these additional taxes.)

(...continued)

8 Section 3304 of FUTA (26 U.S.C. §3304). If the state does not pay the UC benefits, federal law is explicit. The state
will not have a UC program meeting federal requirements and thus the federal unemployment tax paid by employers on
each employee’s annual earnings would be a net tax of 6.0% (with no allowable state tax credit) rather than 0.6% if the
state UC program paid benefits and had no outstanding loans.
9 The Federal Unemployment Account (FUA).
10 Following federal law, at the end of every month 20% of all newly collected FUTA revenue is deposited into EUCA
which is authorized to pay for the federal share of EB. The EUCA balance is limited to the maximum of 0.5% of
covered wages ($25.11 billion in FY2013). If the EUCA balance exceeds the limitation, the excess is distributed to the
FUA.
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3. Federal law allows the FUA to borrow available funds from the other federal
(EUCA and ESAA) accounts within the UTF.11
4. Federal law also authorizes appropriations as loans from the general fund of the
U.S. Treasury if balances in the federal accounts are insufficient to cover their
expenditures.12 (For example, if the states’ borrowing needs exceed the available
FUA balance.) Such appropriations require discretionary action by Congress and
the President.13
Mechanism for Receiving a Loan from the UTF
Once a state recognizes that it does not have sufficient funds to pay UC benefits, the mechanism
for receiving a loan from the UTF is straightforward. The state’s governor (or the governor’s
designee) must submit a letter requesting that the U.S. Labor Secretary advance funds to the state
account within the UTF. Once the loan is approved by the U.S. Labor Secretary, the funds are
placed into the state account in monthly increments.
Loan Repayment
States with outstanding loans from the UTF must repay them fully by the November 10 following
the second consecutive January 1 on which the state has an outstanding loan. If the outstanding
loan is not repaid by that time, the state will face an effective federal tax increase. Thus, a state
may have approximately 22 (if borrowing began on January 1) to 34 months (if borrowing began
on January 2) to repay the loan without a federal tax increase, depending on when it obtained the
outstanding loan.
As of February 18, 2014, approximately $21.2 billion in federal UTF loans to the states were
outstanding. A current list of states with outstanding loans may be found at DOL’s website,
http://www.workforcesecurity.doleta.gov/unemploy/budget.asp#tfloans.
Federal Tax Increases on Outstanding Loans Through
Credit Reductions
If the state does not repay a loan by the November 10 of the second year14, it becomes subject to a
reduction in the amount of state unemployment tax credit applied against the federal
unemployment tax beginning with the preceding January 1st until the state repays the loan fully.

11 42 U.S.C. 1110.
12 42 U.S.C. 1323.
13 At the end of FY2013, the FUA owed $8.42 billion to the general fund of the U.S. Treasury, and owed an additional
$0.4 billion to the other federal accounts within the UTF. The FUA also had $19.96 billion in promissory notes
(outstanding loans) that states are required to repay.
14 The “second year” is the year when the state has outstanding UTF loans on January 1 for the second January 1 in a
row. Depending on the timing when the first loan began, it may actually be the third year of the loan.
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Depending on the duration of the loan and certain other measures, one or more of three different
credit reductions may be required. These reductions are fully catalogued in Table 1. At the height
of the period following the most recent recession (2011), 20 states and the Virgin Islands faced
increased FUTA rates because of outstanding UTF loans.15
Basic Credit Reduction
The credit reduction is initially 0.3 percentage points for the year beginning with the calendar
year in which the second consecutive January 1 passes during which the loan is outstanding and
increases by 0.3 percentage points for each year there is an outstanding loan. For example, in the
first year, the credit reduction results in the net federal tax rate increasing from 0.6% to 0.9%—an
additional $21 for each employee; in the second year, it would increase to 1.2%—a cumulative
additional $42 for each employee.
Additional Credit Reductions: 2.7 Add-on and BCR Add-on
There are two potential additional credit reductions (in addition to the cumulative 0.3 percentage
point increases) during the ensuing calendar years in which a state has an outstanding loan:
1. Beginning in the third year, the 2.7 add-on uses a statutory formula that takes into
consideration the average annual wages and average employment contribution
rate.16 In 2012, the Virgin Islands was subject to this 2.7 add-on.
2. Beginning in in the fifth year, the Benefit Cost Ratio (BCR) add-on replaces the
2.7 add-on and uses the five-year benefit cost rate as well as average wages in its
calculation. 17
Table 1 presents these reductions and the subsequent net FUTA tax faced by state employers as a
result of these unpaid loans. If any January 1 passes without an outstanding balance, the year
count starts over with the next loan. The U.S. DOL maintains a list of potential reduced credit
states at http://ows.doleta.gov/unemploy/docs/reduced_credit_states.xls.
Table 1.Schedule of State Tax Credit Reduction and Net Federal Unemployment Tax
Act (FUTA) Tax
Net FUTA Tax
(0.6% + credit
Loan Year
Credit Reduction
Additional Reductions
reductions)
Year 1 of outstanding loan
0.0%
None
0.6%
Year 2 (applied retroactively
0.3%
None
0.9%
at end of calendar year)

15 See http://ows.doleta.gov/unemploy/docs/reduced_credit_states.xlsx.
16 The 2.7 add-on formula is [(2.7% x 7000/ U.S. Annual Average Wage)-Average Annual State Tax Rate on Total
Wages] x State Annual Average Wage/7000.
17 The BCR add-on formula is: Max [Five-year Average State Unemployment UC Outlays/Taxable Wages, 2.7] -
Average Annual State Unemployment Tax Rate on Total Wages.
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Net FUTA Tax
(0.6% + credit
Loan Year
Credit Reduction
Additional Reductions
reductions)
Year 3
0.6%
2.7 Add-on
1.2% or morea
Year 4
0.9%
2.7 Add-on
1.5% or morea
Year 5
1.2%
BCR Add-on
1.8% or moreb
Year 6
1.5%
BCR Add-on
2.1% or moreb
Year 7
1.8%
BCR Add-on
2.4% or moreb
Year 8
2.1%
BCR Add-on
2.7% or moreb
Year 9
2.4%
BCR Add-on
3.0% or moreb
Year 10
2.7%
BCR Add-on
3.3% or moreb
Year 11
3.0%
BCR Add-on
3.6% or moreb
Year 12
3.3%
BCR Add-on
3.9% or moreb
Year 13
3.6%
BCR Add-on
4.2% or moreb
Year 14
3.9%
BCR Add-on
4.5% or moreb
Year 15
4.2%
BCR Add-on
4.8% or moreb
Year 16
4.5%
BCR Add-on
5.1% or moreb
Year 17
4.8%
BCR Add-on
5.4% or moreb
Year 18
5.1%
BCR Add-on
5.7% or moreb
Year 19
5.4%
BCR Add-on
6.0%
Source: U.S. Department of Labor, Employment and Training Administration.
Notes: 2.7 Add-on = [(2.7% x 7000/U.S. Annual Average Wage) - Average Annual State Tax Rate on Total
Wages] x State Annual Average Wage/7000.
Benefit Cost Ratio (BCR) Add-on = Max [Five-year Average State Unemployment Compensation Outlays
/Taxable Wages, 2.7] - Average Annual State Unemployment Tax Rate on Total Wages.
a. Exact tax depends upon 2.7 Add-on calculation.
b. Exact net tax depends upon BCR Add-on calculation (or the 2.7 Add-on calculation, if the BCR Add-on is
waived).
Avoiding Some or All of the Credit Reduction
Section 272 of P.L. 97-248 allows a delinquent state the option of repaying—on or before
November 9—a portion of its outstanding loans each year through transfer of a specified amount
from its account in the UTF to the FUA.
If the state complies with all the requirements listed below, the potential credit reduction is
avoided (there is no reduction):
 The state also must repay all loans for the most recent one-year period ending on
November 9, plus the potential additional taxes that would have been imposed
for the tax year based upon a state tax credit reduction.
 The state must have sufficient amounts in the state account of the UTF to pay all
compensation for the last quarter of that calendar year without receiving a loan.
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 The state must also have altered its state law to increase the net solvency of its
account with the UTF.
In 2011, 2012, and 2013 South Carolina met these requirements. As a result, employers in South
Carolina were not subject to a state tax credit reduction in the calculation of their FUTA taxes.
(Generally, employers in South Carolina would have paid more in state unemployment taxes to
meet these requirements.)
Cap
Once a state begins to have a credit reduction, the state may apply to have the reductions capped
if the state meets four criteria:
 No legislative or other action in 12 months ending September 30 has been taken
to decrease state unemployment tax effort. (A state cannot actively decrease its
expected state unemployment tax revenue from current law.)
 No legislative or other action has been taken to decrease the state trust account’s
net solvency. (For example, the state would not be allowed to actively increase
the average UC benefit amount from current law requirements.)
 Average state unemployment tax rate on total wages must exceed the five-year
average benefit cost rate on total wages.
 Balance of outstanding loans as of September 30 must not be greater than the
balance three years before.
Waiving the BCR Add-on
The BCR add-on may be waived if the Secretary of Labor determines that the state did not take
legislative or other actions to decrease the state trust account’s net solvency. The 2.7 add-on
would then replace the BCR add-on.
Revenue from Credit Reductions Reduce State UTF Loans
The additional federal taxes attributable to the credit reduction are applied against the state’s
outstanding UTF loan. Thus, while technically employers are paying additional FUTA taxes, the
additional tax pays off a state’s debt. The state’s employers will pay the additional federal taxes
resulting from the credit reduction no later than January 31 of the next calendar year.
Interest Charges on Loans
Since 1982 (P.L. 97-35), states are charged interest on new loans that are not repaid by the end of
the fiscal year in which they were obtained.18 Under previous law, states could receive these loans

18 The American Recovery and Reinvestment Act of 2009, P.L. 111-5 Section 2004, temporarily waived interest
payments and the accrual of interest on loans. The interest payments that were due from the time of enactment
(continued...)

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interest-free.19 The interest is the same rate as that paid by the federal government on state
reserves in the UTF for the quarter ending December 31 of the preceding year, but not higher than
10% per annum. The interest rate for calendar year loans is determined by Section 1202(b)(4) of
the SSA. The interest rate for a calendar year is the earnings yield on the UTF for the quarter
ending December 31st of the previous calendar year. The U.S. Treasury Department calculated the
fourth quarter earnings yield in 2013 to be 2.3874%. Thus, new loans made in calendar year 2014
will be subject to an interest rate of 2.3874%.20
States may not pay the interest directly or indirectly from SUTA revenue or funds in their state
account with the UTF. If states do not repay the interest, or pay the interest with funds from
SUTA taxes, the U.S. Department of Labor is required by federal law to refuse to certify the state
program as being in compliance with federal law.21 Not being in compliance with federal
unemployment law would mean that the state would not be eligible to receive administrative
grants and its state employers would not receive the state unemployment tax credit in the
calculation of their federal unemployment taxes.
States may borrow funds without interest from the UTF during the year. To receive these interest-
free loans, the states must meet five conditions:
1. The states must repay the loans by September 30.
2. For those repaid (by September 30) loans to maintain their interest-free status
there cannot be any loans made to that state in October, November, or December
of the calendar year of such an interest-free loan. If loans are made in the last
quarter of the calendar year, the “interest-free” loans made in the previous fiscal
year will retroactively accrue interest charges.
3. The states must meet funding goals relating to their account in the UTF,
established under regulations issued by DOL.

(...continued)

(February 17, 2009) until December 31, 2010, were deemed to have been made. No interest on advances accrued
during the period. Although interest did not accrue during this period, this did not absolve states from repaying the
underlying loans. If a state did not pay back funds within the prescribed amount of time or make good progress as
determined by the Labor Secretary, the state tax credit was reduced. Beginning on January 1, 2011, the calculation of
interest reverted to permanent law on interest charges.
19 Interest payments can be delayed up to nine months (and no interest on the unpaid interest would accrue) if the most
recent 12-month average unemployment rate (from September of the previous year to August of that year) is 13.5% or
higher (42 U.S.C. §1322(b)(9)). If the state’s January through June average insured unemployment rate (IUR) in the
previous year is 6.5% or higher, the state would be required to pay 25% of that current year’s interest that is due. (The
IUR is the ratio of UC claimants divided by individuals in UC-covered jobs. It excludes unemployed workers who have
exhausted their UC benefits, as well as the self-employed.) The state then would pay the remaining 25% in each of the
next three years. The (75%) remainder of the interest payment would be not be subject to additional interest
calculations (42 U.S.C. §1322(b)(3)(C)). The provisions of P.L. 111-5 did not change the timetable for federal tax
increases resulting from a state’s outstanding loans.
20 Employment and Training Administration, U.S. Department of Labor, Interest Rate on Title XII Advances During
Calendar Year (CY) 2014, Unemployment Insurance Program Letter (UIPL) 8-14, Washington, DC, February 18,
2014, http://wdr.doleta.gov/directives/attach/UIPL/UIPL_8-14.pdf.
http://wdr.doleta.gov/directives/attach/UIPL/uipl_9_12_acc.pdf.
21 42 C.F.R. §503(c)(3) and 26 U.S.C. §3304(a)(17).
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In addition to these first three requirements, the phase-in of two new requirements began in 2014;
the full effect of the requirements begins in 2019.22
4. States must have had at least one year in the past five calendar years before the
year in which advances are taken where its Average High Cost Multiple23
(AHCM) was greater than or equal to 1.0.
5. Additionally, states must meet two criteria for maintenance of tax effort in every
year from most recent year the AHCM was at least 1.0 and the year in which
loans are taken.
a. The average state unemployment tax rate (total state unemployment tax
amount collected over total taxable wages) was at least 80% of the prior
year’s rate.
b. The average state unemployment tax rate is at least 75% of the average
benefit-cost ratio over the preceding five calendar years, where the benefit-
cost ratio for a year is defined as the amount of benefits and interest paid in
the year divided by the total covered wages paid in the year.
Status of Outstanding Loans, Accrued Interest
Owed, and State Tax Credit Reductions
Table 2 lists all states that have outstanding loans. The table also includes information on accrued
interest payments for FY2013. The third column provides information on whether a state was
subject to a credit reduction for tax year 2013. The last column provides the net FUTA tax faced
by employers in each state that had an outstanding loan. If a state is not listed on this table, the
state did not have any outstanding loans on February 18, 2014, did not have outstanding interest
accruals, and was not subject to a state tax credit reduction on the calculation of the net FUTA tax
in 2013.

22 Employment and Training Administration, U.S. Department of Labor, “Federal-State Unemployment Compensation
Program Funding Goals for Interest-Free Loans,” 75 Federal Register 57146, September 17, 2010.
23 The average high-cost multiple (AHCM) is the ratio of actual UTF account balances to the average of the three
highest years of benefit payments experienced by the state over the past 20 years. Presumably, the average of the three
highest years’ outlays would be a good indicator of potential expected UC payments if another recession were to occur.
Under these assumptions, if a state had saved enough funds to pay for an average high-year of UC benefit activity, its
AHCM would be at least 1.0.
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Table 2.Outstanding Loan Balances, Interest Owed,
and Potential State Tax Credit Reduction
(February18, 2014)
2013 Net FUTA
Outstanding
Tax
Advance
Interest for
2013 Tax Credit
(0.6% + credit
State
Balance
FY2014
Reduction
reductions)
Arkansas
$117,171,234
$1,283,070
0.9
1.5%
California
10,001,840,413
93,035,423
0.9
1.5
Connecticut
573,439,549
5,563,804
0.9
1.5
Delaware
71,429,695
693,009
0.6
1.2
Georgia
178,330,019
2,323,617
0.9
1.5
Indiana
1,402,848,658
13,280,588
1.2
1.8
Kentucky
660,492,548
6,162,322
0.9
1.5
Missouri
321,450,890
3,120,669
0.9
1.5
Nevada
0
1,424,741
a
0.6
New Jersey
157,217,265
1,084,994
a
0.6
New York
3,180,267,258
28,852,558
0.9
1.5
North Carolina
1,762,752,993
18,407,204
0.9
1.5
Ohio
1,619,600,290
15,162,030
0.9
1.5
Pennsylvania
67,412,194
46,446
a
0.6
Rhode Island
112,269,970
1,157,282
0.9
1.5
South Carolina
456,512,367
4,475,533
b
0.6
Virgin Islands
86,306,176
788,420
1.2
1.8
Wisconsin
432,418,197
3,702,389
0.9
1.5
Totals
$21,201,759,715
$200,564,100

Source: Congressional Research Service table prepared using data from the U.S. Bureau of Public Debt,
http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm, and the U.S. Department of Labor
http://ows.doleta.gov/unemploy/content/reduced_credit_states.xls.
a. Not applicable. State has not had two consecutive January 1s with an outstanding loan balance.
b. Qualified for avoidance.

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link to page 16 The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States

Table 3 provides financial information for the unemployment trust fund accounts. The first data
column lists the amount of state taxes collected in the previous 12 months. The second column
lists the balance of each state’s account in the UTF at the end of the 12-month period. The third
column calculates the ratio of the trust fund balance to the estimated sum of wages earned by
employees in jobs covered by the UC system. The fourth column lists the AHCM where a number
less than 1.0 does not meet DOL’s definition of minimally solvent. The fifth column reports the
outstanding trust fund loan (if any).
The sixth column lists the per employee loan amount (total loans divided by total covered
employees). This statistic gives a sense of how much in state taxes per employee would have to
be raised if a state were to repay the entire loan amount within one year. The final column lists the
ratio of total loans to total covered wages. This ratio aids in the comparison of the size of the loan
to the general wage profile in the state.

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Table 3.State Unemployment Trust Fund Accounts:
Financial Information by State, 3rd Quarter Calendar Year 2013
Revenues
Outstanding
Percentage of
Past
Ratio of Trust
Trust Fund
Loans to Yearly
12 Months
Trust Fund
Fund
Average High
Loan
Loan per
Total Wages in
($ in
Balance
to Total Covered
Cost Multiple
($ in
Covered
Covered
State
thousands)
($ in thousands)
Wages
(AHCM)
thousands)
Employee
Employment
Alabama
$433,519
$247,503
0.41
0.16
$0
—
—
Alaska
234,363
329,345
2.67
1.02
0
—
—
Arizona
444,466
61,270
0.07
N.A.
0
—
—
Arkansas
371,430
157,336
0.45
N.A.
157,662
$140
0.46
California
6,729,503
31,958
0
N.A.
9,189,069
620
1.36
Colorado
743,263
579,175
0.6
N.A.
0
0
—
Connecticut
858,487
225,661
0.28
N.A.
573,722
360
0.73
Delaware
136,584
37,339
0.23
N.A.
71,465
181
0.44
District of
160,063
313,954
0.97
0.92
0
—
—
Columbia
Florida
2,145,175
783,933
0.3
N.A.
0
—
—
Georgia
897,516
221,118
0.15
N.A.
296,330
79
0.20
Hawaii
392,173
261,504
1.43
0.3
0
—
—
Idaho
302,678
406,392
2.35
N.A.
0
—
—
Il inois
3,047,878
1,177,936
0.49
N.A.
0
—
—
Indiana
767,271
7,720
0.01
N.A.
1,352,126
492
1.47
Iowa
565,842
828,923
1.77
1.07
0
—
—
Kansas
413,460
106,300
0.22
0.08
0
—
—
Kentucky
527,773
27
0
N.A.
612,559
357
1.13
Louisiana
251,873
832,749
1.26
1.2
0
—
—
Maine
177,531
297,186
1.87
0.93
0
—
—
Maryland
890,413
954,663
0.98
0.67
0
—
—

Revenues
Outstanding
Percentage of
Past
Ratio of Trust
Trust Fund
Loans to Yearly
12 Months
Trust Fund
Fund
Average High
Loan
Loan per
Total Wages in
($ in
Balance
to Total Covered
Cost Multiple
($ in
Covered
Covered
State
thousands)
($ in thousands)
Wages
(AHCM)
thousands)
Employee
Employment
Massachusetts
1,877,861
781,444
0.49
0.13
0
—
—
Michigan
1,781,552
1,538,513
1.05
N.A.
0
—
—
Minnesota
1,425,184
990,480
0.96
0.32
0
—
—
Mississippi
237,308
514,457
1.73
1.5
0
—
—
Missouri
648,070
75,958
0.09
N.A.
322,163
127
0.38
Montana
159,806
199,139
1.55
0.91
0
—
—
Nebraska
142,849
364,493
1.32
1.65
0
—
—
Nevada
544,201
12,323
0.03
N.A.
520,153
465
1.26
New Hampshire
174,433
239,926
1.03
0.75
0
—
—
New Jersey
2,998,348
33,039
0.02
N.A.
105,057
28
0.06
New Mexico
215,857
63,699
0.27
0.2
0
—
—.
New York
3,187,090
23,521
0.01
N.A.
2,799,213
333
0.68
North Carolina
1,278,257
222,849
0.17
N.A.
2,002,781
522
1.52
North Dakota
104,589
154,236
0.97
1.13
0
—
—
Ohio
1,228,081
162,090
0.09
N.A.
1,553,203
317
0.91
Oklahoma
561,747
1,027,713
1.91
1.45
0
—
—
Oregon
1,066,294
1,738,304
3.14
1.03
0
—
—
Pennsylvania
3,090,442
521,632
0.25
N.A.
0
—
—
Puerto Rico
201,846
388,379
2.32
0.82
0
—
—
Rhode Island
273,489
33,067
0.21
N.A.
162,967
377
1.08
South Carolina
424,164
241,161
0.43
N.A.
531,529
300
0.96
South Dakota
43,590
62,981
0.59
0.91
0
—
—
Tennessee
642,704
807,881
0.83
0.57
0
—
—
Texas
2,636,812
1,663,034
0.35
N.A.
0
—
—
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CRS-14
Revenues
Outstanding
Percentage of
Past
Ratio of Trust
Trust Fund
Loans to Yearly
12 Months
Trust Fund
Fund
Average High
Loan
Loan per
Total Wages in
($ in
Balance
to Total Covered
Cost Multiple
($ in
Covered
Covered
State
thousands)
($ in thousands)
Wages
(AHCM)
thousands)
Employee
Employment
Utah
361,745
632,260
1.54
1.12
0
—
—
Vermont
143,400
79,457
0.93
0.14
0
—
—
Virgin Islands
6,417
9,907
1.04
N.A.
76,406
1,959
7.55
Virginia
793,765
267,652
0.18
0.04
0
—
—
Washington
1,346,610
2,975,107
2.5
1.1
0
—
—
West Virginia
216,834
122,391
0.61
0.33
0
—
—
Wisconsin
1,208,297
5,629
0.01
N.A.
409,207
156
0.48
Wyoming
137,530
277,512
2.93
1.64
0
—
—
Source: Employment and Training Administration, U.S. Department of Labor, Unemployment Insurance Data Summary, 3rd Quarter 2013 Report, Washington, DC, 2013,
Table: Financial Information by State for CYQ 2013.3 and individual state reports, http://ows.doleta.gov/unemploy/content/data_stats/datasum11/DataSum_2013_3.pdf.
Notes: Total covered wages are based on extrapolated wages for the most recent 12 months. Trust Fund Balance does not include outstanding debt. States may have
obligated some portion of their UTF funds and may be borrowing to fund unemployment benefits even if the state’s UTF balance appears to be positive.
N.A. = Not Applicable: these states have outstanding debts that exceed their fund balances. Conversely, “—” no outstanding federal loan (states may have additional loans
financed outside of the UTF).

The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States

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