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California could become first state to borrow to pay unemployment benefits during coronavirus crisis

IMAGE: CNBC

By Kathleen Pender | 25 April 2020

SAN FRANCISCO CHRONICLE — Within the next couple of weeks, California’s unemployment insurance fund — which was the most-insolvent state fund coming into the coronavirus crisis — will run out of money. It’s vying with New York and Ohio to be the first state fund to go negative since the last recession.

People receiving unemployment benefits won’t notice a difference because when a fund runs dry, a state can borrow from the federal government to keep benefits flowing. California has been authorized to borrow, and will probably start “at the end of April or beginning of May,” Loree Levy, a spokeswoman for the Employment Development Department, said in an email. […]

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