(Juneau) – Earlier last week, Alaska Governor Mike Dunleavy and the Alaska Department of Labor and Workforce Development Commissioner Dr. Tamika Ledbetter announced $66.7 million in unobligated CARES Act funding to be deposited into the Unemployment Insurance (UI) Trust Fund.
“Our top priority is to rebuild the solvency while we keep costs low for Alaska employers,” said Governor Dunleavy. “These newly added CARES funds will still significantly bolster the health of the fund and overall facilitate a flourishing Alaskan economy. Contributing to the UI fund will be a crucial step towards normalcy for Alaskan businesses.”
In July, the total estimated CARES Act funds available for the UI fund was around $24 million. Governor Dunleavy’s prompt action to deposit more than double the previous amount into the UI fund will reduce the potential adjustment applied to the calendar year 2022 employer tax rates.
The UI 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 that pays out unemployment insurance benefits to eligible workers. Since the pandemic hit, the UI Trust Fund has 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.
Alaska’s Department of Labor & Workforce Development estimates that the total amount of funds needed to avoid an adjustment is $74.4 million. Although the $66.7 million was not the full amount needed, Commissioner Ledbetter agrees that the allocated amount will have a strong outcome for the UI Trust Fund.
“Governor Dunleavy has allocated $67 million in CARES Act money to reduce the future tax burden for Alaska businesses,” stated Commissioner Ledbetter. “His swift action comes at a critical time and strengthens the Unemployment Insurance Trust Fund.”