Know A Downturn: Idaho!
Idaho Statesman:
Idaho's jobless fund is going broke
A law designed to ease unemployment taxes backfired on the very businesses it was meant to help.
These days Roger Madsen, Idaho Department of Labor director, regrets not being more aggressive in ensuring that Idaho's fund for paying benefits to jobless workers could withstand a long recession's onslaught.
But in 2004, Idaho was booming. National magazines were heralding the state's business environment. Idaho was in the midst of a tech, rec and building boom that some said made us resistant to recession.
A coalition of business, labor and social organizations worked with Madsen to rewrite the unemployment-fund law in 2004, which lowered the tax on businesses and reduced the size of the fund that pays for unemployment checks. Backers never anticipated the economy would take the kind of body blow it got last fall, business leaders say today.
Now the law and the recession are clobbering Idaho businesses, which saw unemployment-tax rates climb by 70 percent in 2009 to pay checks to the growing number of unemployed workers. Businesses could see another 100 percent increase in 2010 at a time when many already are struggling, labor officials say.
The law will clobber some workers, too. Idaho's approach to unemployment insurance taxes business more and pays laid-off workers less in lean times. That means as Idaho sinks deeper into the worst economic crisis in three generations, the cap on Idaho weekly jobless benefits will fall by $33 a week to $329 beginning in 2010...
WHAT WENT WRONG?
Idaho businesses are the main support for unemployment insurance, paying a business tax that is levied based on how much individual companies use the system.
For years, the state operated like many others across the country, accruing money during the good times as a hedge against facing large payouts if the economy sank into recession. Other states, such as Oregon and Washington, stayed with that idea, collecting taxes at a steady rate through good times and bad. Both states have solid funds today that should weather the recession...
Idaho's State Coincident Index (Echos GDP) Jan. 1979 - Feb. 2009
The coincident index combines four state-level indicators to summarize current economic conditions
in a single statistic. The trend for each state's index is set to the trend of its gross domestic product (GDP),
so long-term growth in the state's index matches long-term growth in its GDP.Federal Reserve Bank of Philadelphia
Y-Y Pct. Change Idaho Nonfarm Payrolls Jan. 1990 - March 2009
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Get out of that state.... Get out of that state....