DENVER (KDVR) — State leaders have been detailing the strong fiscal shape Colorado is in. Despite the state moving to make some big distributions recently, there is still one area in the red, and to the tune of a billion dollars.
“The unemployment insurance system was under significant pressure during the COVID pandemic,” said state Sen. Chris Hansen.
The Colorado Fiscal Institute says 375,000 Coloradans claimed unemployment during the first two months of the pandemic. All the claims quickly depleted the funding that was in the system.
“We had massive requirements on the unemployment fund, which were not anticipated. So as a result, we had this massive debt to the federal government that we now have to deal with,” said Sen. Bob Rankin of Garfield County.
How will Colorado pay the feds back for unemployment?
The state owes the federal government $1 billion. So a bipartisan group of lawmakers is looking to pay some of that down using $600 million in stimulus funds.
“I mean we have a lot of work we’re doing with the different buckets of money. We’re working on mental health care (that’s one of the buckets we’re using for federal dollars), we’re working on housing — $550 million for attainable housing — so there’s always more you can do. I think that we as a legislature, as a body, are being very comprehensive in the way that we are trying to meet some of the most critical areas,” said Rep. David Ortiz.
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The state is expecting the remaining debt to paid by employers paying into that fund by the end of this year. Leaders say this new move is about making sure businesses are not tackling the state’s burdens alone and workers will have the benefits they need.
“We might have another pandemic-related recession in just a few months. I hope not, but it could happen. And so accelerating solvency and putting us more on a solvent footing is going to be good for us in the long run because the system is going to be ready to pay benefits if they need it,” said Kathy White of the Colorado Fiscal Institute.
Lawmakers said the pandemic highlighted some faults within the unemployment insurance system. They plan to make some fixes made during the pandemic permanent through this legislation too.