Capitol Alert

The latest on California politics and government

jobless1.JPGAs severe recession struck the nation a half-decade ago, California and most other states borrowed heavily from the federal government to prop up their unemployment insurance programs.

At one time, the states owed Washington more than $47 billion, but the debt has since been cut by more than half to $21 billion, and many of the debtor states have completely erased their negative balances, according to a nationwide survey by Stateline, a website on state government affairs maintained by the Pew Charitable Trusts.

But not California. The state began borrowing in 2009 and accounted for more than $10 billion of the debt at its peak, but it has declined only slightly - thanks to a political stalemate in the Capitol - and California now accounts for nearly half of the national debt total.

While other states have raised unemployment insurance taxes on employers and/or reduced benefits to put their programs in the black, the Legislature has spurned Gov. Jerry Brown's calls for changes in California, not only to whittle down the debt but to build reserves in the Unemployment Insurance Fund to cushion future downturns.

Republicans oppose any increase in taxes, while Democrats oppose any reduction in benefits or eligibility, and in the absence of state action, the federal government has hiked payroll taxes itself to gradually reduce California's debt, which stands at just under $10 billion.

The federal tax increase on employers will amount to more than $900 million this year and the state is also paying more than $200 million in interest on the loan this year.

PHOTO: Former and current high school students attend a junior college exploration workshop sponsored by the Greater Sacramento Urban League on Sept. 20, 2011. The Sacramento Bee/Randy Pench



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