"The size of the unemployment insurance system deficit calls for a coordinated state and federal solution," said Doug Holmes recently before the New Jersey legislature. Holmes, who is scheduled to testify before Senate Finance on Wednesday is the president of the Strategic Services on Unemployment & Workers Compensation and the National Foundation for Unemployment & Workers' Compensation.
He said most states have deficits so great that it isn't possible to increase state jobless tax rates enough in the next five years to reach solvency levels without jeopardizing job creation efforts that are essential to the economic recovery. Long-term and short-term solutions will be needed to maintain solvency of state unemployment trust fund accounts.
"Many states and Congress have recognized the need to avoid significant unemployment insurance tax increases in 2010 for the very reason that large increases could put the economic recovery at risk," he said in prepared testimony.