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Tx Unemployment Fund Running Low

Texas Unemployment Fund is hundreds of millions of dollars below legally required levels.

Students will recall that we studied employer SUTA State Unemployement Tax  requirements in Chapter 13 on current liabilities in Intermed Accounting. Read the article to get an understanding of what is about to happen.

Employers lay off more workers.

Workers file for unemployment benefits.

The state fund runs low.

Claims against employers as well as the new overall  low balance require the state to demand a higher percentage of the current payroll to be paid as potential state unemployment tax to replenish the fund.

This could not be a worse downward spiral. At a time when we need more not less employment, employers are hit with more taxes to pay the unemployed which will act as a brake on hiring anyone else.

The state plans on higher taxes and issuing bonds, really?  I have made the point that the munitipal bond market is going from bad to worse. This is already evident in California and New York. As I have mentioned it is only  a matter of time until the stronger states realize they are being asked to support the weaker, read bankrupt, ones. At some point taxpayers will realize it is every state for itself.

Just this morning I heard someone saying we need prudent management of the problem. At the national level this guy's idea of prudent was $3 trillion of federal debt. Prudent?

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3 responses to “Tx Unemployment Fund Running Low”

  1. Sylvia Avatar
    Sylvia

    It is a scray thought that the millions of Texans receiving unemployment may one day face the fact that there is just simply no more money. In the article it stated that there was farud and overpaymnet. I think it’s time that a group of independent auditor’s who are heavily experienced at detecting fraud step in and put an end to this. I am not saying it would solve the problem,but if we can stay afloat just that much longer the better. Enfocing stricter internal controls to ensure any future fraudelent transactions and overpayments is a necessity.

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  2. Dennis Elam Avatar
    Dennis Elam

    I read teh IRS is already hiring more agents, expect a lot more indignation over scams and cheating on such in the near future. Being broke will make a Bernie Madoff of many people.

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  3. Ricardo Campos Avatar
    Ricardo Campos

    I think people also need to realize that these unemployment checks are only a short time helping hand and not necessarily a long term deal. Texas is doing a lot better than most states and there are jobs out there. People have to be willing to change their lifestyle rather than completely depend on the unemployment funds. If not, as Dr. Elam mentioned, this could put us in a worse downward spiral.

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