The U.S. Department of Labor (USDOL) published a report this month highlighting the solvency of the State’s Unemployment Insurance Trust Funds.  The USDOL employs an Average High Cost Multiple (AHCM) method to determine solvency where trust fund balances are compared to the average benefits needed over the past 23 years.


Following the Great Recession ending in 2009, the Trust Fund balances of every jurisdiction in the nation’s unemployment system were severely depleted.  To meet obligations, most States borrowed heavily from the Federal Government or from other sources.  With the exception of the Virgin Islands, all States have retired their Title XII loans to the Federal Government.  However, Pennsylvania and Michigan still have outstanding debt from other sources.  Pennsylvania’s outstanding debt is estimated to be roughly $987 million while Michigan’s exceeds $700 million.


After years of recovery, the Trust Fund balances have improved.  But, according to the U.S. Department of Labor, nearly half of the nation’s 53 unemployment jurisdictions (the 50 states plus Puerto Rico, Virgin Islands and D.C.) are below the recommended standard for solvency and are at risk should the nation encounter a recession in the near future.


The chart below shows the jurisdictions and their AHCM solvency ranking in descending order.  States with ratios exceeding 1 (29 states) meet the recommended requirements whereas States with ratios below 1 (24 states) do not.