Status of the Unemployment Trust Fund and Related Issues Commission - PowerPoint PPT Presentation

Status of the Unemployment Trust Fund and Related Issues Commission on Unemployment Compensation Ellen Marie Hess, Commissioner December 9, 2015

Trust Fund Data—Standard Forecast (Millions of Dollars) 2 2014 2015 January 1 Balance $186.9 $448.3 Tax Revenue $749.9 $671.3 Interest Revenue $9.4 $15.1 Benefits $498.4 $397.8 December 31 Balance $448.3 $736.9 Solvency Level (6/30) 40.3% 57.0% December 31, 2014, balance includes $0.5 million from FUTA Credit Reduction paid to IRS.

June 30 Trust Fund Balances and Solvency 3 $1,400 $1,182 $1,198 $1,171 $1,122 67% 65% $1,200 70% 70% $1,011 64% $1,000 $825 $757 57% 64% Millions $800 $564 $600 40% $335 $291 $400 24% 24% $135 $200 9% $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ($80) ($104) -$200 -8% -6% Trust Fund Solvency shown as a percent (%)

Average Total State Tax 4 $250 $236 $234 $221 $16.00 $215 $16.00 $16.00 $16.00 $30.40 $200 $42.40 $186 $17.60 $37.60 $166 $16.00 Cost per Employee $151 $11.20 $16.00 $133 $150 $5.60 $118 $117 $22.40 $111 $2.40 $103 $1.60 $8.00 $99 $4.80 $100 $6.40 $1.60 $187.60 $187.40 $177.60 $161.40 $158.80 $145.40 $130.60 $127.60 $115.40 $110.00 $106.20 $50 $97.40 $96.60 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 base tax pool tax fund builder tax Calendar Year

Pool Taxes 5 45 $42.40 40 $37.60 35 $30.40 30 Cost per Employee 25 $22.40 20 $17.60 15 $11.20 10 $8.00 $6.40 $5.60 $4.80 5 $2.40 $1.60 $1.60 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Calendar Year

Distribution of 2015 and 2016 Base Tax Rates (excluding 2015 0.20% fund builder tax) Computed and Assigned Rates 6 Tax Rates Number of Employers Percent of Total Computed 2015* 2016** 2015* 2016** 118,381 125,561 59.3% 60.4% 0.10% 9,703 10,044 4.9% 5.5% 0.14%-0.90% 8,541 8,569 4.3% 4.1% 1.01%-1.95% 5,449 5,981 2.7% 2.9% 2.03%-2.90% 4,943 4,426 2.5% 2.1% 3.00%-3.91% 3,590 3,228 1.8% 1.6% 4.05%-4.95% 2,569 2,465 1.3% 1.2% 5.07%-5.94% 692 304 0.3% 0.1% 6.00%-6.15% 14,594 12,521 7.3% 6.0% 6.20% Assigned 24,809 26,878 12.4% 12.9% New, 2.50% 639 640 0.3% 0.3% Delinquent, 6.20% 222 260 0.1% 0.1% Foreign Contractor, 6.20% 5,480 7,135 2.7% 3.4% Other, 6.20% 199,612 208,012 100.0% 100.0% Total Taxable wage base is $8,000. *excluding 0.14% pool tax. **excluding 0.07% pool tax.

Claims Filed 7 Calendar Year Initial Claims 2010 380,830 2011 330,057 2012 301,211 2013 276,807 2014 224,882 2015 (Jan. – Oct.) 149,271* * Annual claims projected to be 184,000.

Virginia’s Unemployment Rates 2013 - 2015 (year to date) 8 (not ¡seasonally ¡adjusted) ¡ 6.5 6.0 Percent ¡of ¡Labor ¡Force ¡ 5.5 5.0 4.5 4.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015

UI Initial Claims 2013 - 2015 (year to date) 9 42,500 ¨ Total initial claims through October this year are down 18.4% 37,500 because of fewer layoffs in construction and 32,500 manufacturing. 27,500 ¨ October 2013 increase includes initial claims 22,500 from partial federal government shutdown. 17,500 12,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015

UI Final Payments 2013 - 2015 (year to date) 10 7,000 For the first ten ¨ months of 2015, 6,500 final payments are down 23.5% from 6,000 2014 and 38.0% 5,500 from 2013. 5,000 The exhaustion ¨ 4,500 rate in October was 41.2%, down 4,000 from last October’s 44.6%. 3,500 3,000 2,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015

Exhaustion Rates 2013 - 2015 (year to date) 11 49.0% 48.0% 47.0% Exhaus3on ¡Rate ¡ 46.0% 45.0% 44.0% 43.0% 42.0% 41.0% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2013 2014 2015

Fourth Circuit States 12 Trust Fund Average Tax Average Tax 2015 2015 2015 2015 Balance per Employee Rate Taxable Maximum Maximum State (10/31/15) (year ending (year ending Wage Base Weekly Weekly Potential (Millions) 12/31/14) 12/31/14) Benefit Benefit Duration Replacement (Weeks) Rate DC $354 $251 2.79% $9,000 $359 24% 19 – 26 MD $984 $233 2.74% $8,500 $430 43% 26 NC $996 $477 2.20% $21,700 $350 41% 5 – 12 SC $272 $340 2.43% $14,000 $326 42% 13 – 20 VA $765 $210 2.62% $8,000 $378 39% 12 – 26 WV $104 $362 3.02% $12,000 $424 55% 26 US Avg. $396 2.95% $13,408 $431 45%

Short-Time Compensation and Military Trailing Spouse Updates 13 ¨ Short-Time Compensation (STC): U.S. Department of Labor has written that Virginia’s STC law precludes Virginia from qualifying for the STC grant due to sunset provisions in 60.2-710(5) and 60.2-710(6). ¤ Since the January 1, 2015, implementation of the law, there have been no participating employers.

Short-Time Compensation and Military Trailing Spouse Updates—Impact of Military Trailing Spouse Benefits 14 ¨ Military Trailing Spouse: For July 1 – October 31, 2015, $282,072.60 in benefits were paid to 130 claimants. ¤ Benefits paid in FY 2015 were $658,597, which reduced the balance by the same amount. ¤ Solvency was 0.1 percentage point lower. ¤ The 2016 base tax rates were not affected. ¤ The 2016 pool tax rate was not affected.

15 Over-the-year Growth (seasonally adjusted data) Total Nonfarm Employment Percent ¡ Source: VEC Current Employment Statistics and Bureau of Labor Statistics -­‑6.0 ¡ -­‑5.0 ¡ -­‑4.0 ¡ -­‑3.0 ¡ -­‑2.0 ¡ -­‑1.0 ¡ 0.0 ¡ 1.0 ¡ 2.0 ¡ 3.0 ¡ 4.0 ¡ Jan-­‑03 ¡ May ¡ September ¡ Jan-­‑04 ¡ May ¡ September ¡ Jan-­‑05 ¡ May ¡ September ¡ Jan-­‑06 ¡ May ¡ September ¡ Jan-­‑07 ¡ May ¡ September ¡ Jan-­‑08 ¡ May ¡ Virginia ¡ September ¡ Jan-­‑09 ¡ May ¡ September ¡ U. ¡S. ¡ ¡ Jan-­‑10 ¡ May ¡ September ¡ Jan-­‑11 ¡ May ¡ September ¡ Jan-­‑12 ¡ May ¡ September ¡ Jan-­‑13 ¡ May ¡ September ¡ Jan-­‑14 ¡ May ¡ September ¡ Jan-­‑15 ¡ May ¡ September ¡

Virginia Nonfarm Employment by Industry 2004 and 2014 16 3,587,400 Total nonfarm 3,774,000 10,300 Mining and logging 9,500 230,900 Construction 177,900 298,700 Manufacturing 231,600 646,400 Trade, transportation, and utilities 643,300 98,300 Information 71,300 2004 189,000 Financial activities 193,200 2014 578,500 Professional and business services 677,600 385,000 Education and health services 496,400 320,100 Leisure and hospitality 371,400 179,400 Other services 195,600 650,900 Government 706,300 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Source: VEC Current Employment Statistics

Virginia Nonfarm Employment by Industry Employment Change 2004-2014 17 186,600 Total nonfarm (5.2%) -800 Mining and logging (-7.8%) -53,000 Construction (-23.0%) -67,100 Manufacturing (-22.5%) -3,100 Trade, transportation, and utilities (-0.5%) -27,000 Information (-27.5%) 4,200 Financial activities (2.2%) 99,100 Professional and business services (17.1%) 111,400 Education and health services (28.9%) 51,300 Leisure and hospitality (16.0%) 16,200 Other services (9.0%) 55,400 Government (8.5%) -100,000 -50,000 0 50,000 100,000 150,000 200,000 Source: VEC Current Employment Statistics

Virginia Nonfarm Establishments 2004 and 2014 18 201,875 Total nonfarm 234,145 1,983 Mining and logging 1,929 24,401 Construction 19,891 6,015 Manufacturing 5,849 44,267 Trade, transportation, and utilities 41,738 3,728 Information 3,678 Establishments 2004 18,895 Financial activities Establishments 2014 19,791 39,334 Professional and business services 50,370 16,319 Education and health services 38,141 15,593 Leisure and hospitality 18,487 22,817 Other services 23,623 3,629 Public Administration (Government) 4,038 0 50,000 100,000 150,000 200,000 250,000 Source: 2004 -2014 QCEW

Nonfarm Employment by Metropolitan Area 2004 and 2014 19 54,300 Winchester MSA 59,800 Virginia Beach-Norfolk-Newport 749,900 News MSA 753,300 49,300 Staunton MSA 48,500 156,800 Roanoke MSA 160,200 593,900 Richmond MSA 631,100 2004 1,233,800 Northern Virginia MSA 1,379,600 2014 102,700 Lynchburg MSA 102,800 60,800 Harrisonburg MSA 63,900 96,400 Charlottesville MSA 109,400 Blacksburg-Christiansburg-Radford 73,200 76,100 MSA 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Source: VEC Current Employment Statistics

Nonfarm Employment by Metropolitan Area Employment Change 2004-2014 20 5,500 Winchester MSA (10.1%) 3,400 Virginia Beach-Norfolk-Newport News MSA (0.5%) -800 Staunton MSA (-1.6%) 3,400 Roanoke MSA (2.2%) 37,200 Richmond MSA (6.3%) 145,800 Northern Virginia MSA (11.8%) 100 Lynchburg MSA (0.1%) 3,100 Harrisonburg MSA (5.1%) 13,000 Charlottesville MSA (13.5%) 2,900 Blacksburg-Christiansburg-Radford MSA (4.0%) -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Source: VEC Current Employment Statistics

Labor Force Participation Rates 21