HARTFORD (AP) - Among the challenges Connecticutâ€™s incoming governor faces: an insolvent unemployment compensation fund that could ultimately cost the stateâ€™s employers hundreds of millions of additional dollars in payments.
A warning about the condition of the Unemployment Insurance Trust Fund was included in a transition memo the Department of Labor drafted for Democratic Gov.-elect Ned Lamont, who takes office in January.
â€śThe UI Trust Fund, out of which the UI Benefits are paid, is not solvent. The current system of imbalanced Unemployment Insurance tax benefit payouts is not sustainable,â€ť reads the document, obtained by The Associated Press through a public-records request. Departing Democratic Gov. Dannel P. Malloy asked each of his state agency heads to prepare transition reports for his successor.
There is currently $609 million in the trust fund, which is funded by employers. The recommended amount, however, is $1.7 billion to handle an economic downturn.