Floor Pass has the bad news.
The Texas Workforce Commission released its latest projection for the unemployment insurance trust fund balance, and the news is even worse than last month's.
TWC estimates the fund's balance will have plummeted to just $19 million by October 1 - that's $840 million below the trust fund's legal minimum balance of $858. Last month, the TWC projected an $813 million deficit.
This is the third consecutive month where TWC has projected the fund to be worse off than the previous month's estimate. High numbers of layoffs have meant the fund is paying out much more in benefits than usual. To put it in perspective, in the last week of March 2008 TWC paid 95,000 claims to the tune of $27 million in benefits. In the last week of March 2009, the fund paid 250,000 claims and $74 million in benefits - that's about a 275 percent increase in benefits payouts from the previous year.
TWC's 2009 Trust Fund Projections
January projection: $447 million below the floor
February projection: $750 million below the floor
March projection: $813 million below the floor
April projection: $840 million below the floor
Ed Sills, spokesman for the state AFL-CIO, urged the state to take the federal unemployment benefits money so it can soften next year's employer tax increase and help more jobless Texans.
Noting that Laffer in 2006 predicted there wouldn't be a recession, Sills said, "Citing Laffer for advice on how to run the Texas economy is like relying on candy manufacturers to set dental policy."