Governor Mike Dunleavy and Alaska Department of Labor and Workforce Development Commissioner Dr. Tamika Ledbetter announced on Tuesday that $24 million in unobligated CARES Act funding will be deposited into the Alaska Unemployment Insurance Trust Fund.
The Unemployment Insurance Trust Fund consists of tax contributions paid by the employee and employer on wages collected in the state. Tax revenues are deposited into a fund which pays out unemployment insurance benefits to eligible workers. Since the pandemic hit, the Unemployment Insurance Trust Fund distributed more than $1.3 billion in state and federal funds. Temporary federal programs extended eligibility periods and made unemployment insurance payments available to the self-employed for the first time ever. The balance of the fund is now at $280 million. It has declined by approximately 40% since March of 2020.
Gov. Dunleavy said:
“The solvency of the UI Trust Fund is critically important to a healthy state economy. Depositing unobligated CARES Act funds into the UI Fund will go a long way toward rebuilding its solvency while lowering costs for Alaskan employers. This is an important step to getting Alaskan businesses and the economy back up and running again.”
Commissioner Ledbetter stated:
“Alaska’s UI system is unique. State law allows for a solvency adjustment during extreme fluctuations in the economy. Our priority is to keep tax burdens low and support small business to the best of our ability, especially now as the economy is rebounding.”
The National Federation of Independent Business has called on the State of Alaska to make replenishment of the Unemployment Insurance Trust Fund a top priority.