Falling, falling

As we showed in the March edition of Numbers You Need, the number of laid-off Oklahomans receiving unemployment benefits is skyrocketing. An average of 4,881 workers filed first-time claims in January, an increase of 149 percent compared to September 2008. Continuing UI claims have increased by 80 percent over the same period, as the state’s unemployment rate jumped from 3.8 percent to 5.0 percent.

With more laid-off workers receiving UI benefits, the balance in the state’s  UI Trust Fund is starting to tumble. As you can see from the chart below, the UITF balance reached a peak in August 2008 and has been falling steadily since. Its current balance, $763 million, is a full $100 million less than in August.


The state entered the recession with its UI system on very strong financial footing. There is little concern that Oklahoma will join the ranks of states whose trust funds are insolvent and have had to rely on federal loans. However, shrinking balances are a genuine problem for Oklahoma. Under state law, regardless of how flush our trust fund balances, when  balances start to fall, the state gets kicked into “conditional factors”, which automatically triggers higher tax rates on businesses and reduced benefits for the unemployed. There are four levels of conditional factors, ranging from mildest to most severe; the state will know this fall whether conditional factors will lock into place for 2010.While conditional factors represent prudent financial management of the fund, it is obvious that raising business taxes and cutting worker benefits in the midst of a downturn is both painful to those affected and economically counter-stimulative. Therefore, the possibility of receiving a $75 million deposit to the UI Trust Fund through a provision of the federal stimulus legislation known as the Unemployment Insurance Modernization Act represents an important opportunity for the state (see the National Employment Law Project’s factsheet on the subject). The Oklahoma Employment Security Commission is leading a strong push for passage of legislation to implement UIMA, with support from Governor Henry, the Chamber of Commerce and others; however, the enabling legislation got held up in the House, where some members have balked at adopting federally-mandated reforms.

It would be very unfortunate if Oklahoma were to pass up an easy, painless chance to help hard-pressed workers and businesses. Look for an issue brief on this subject from OK Policy in the coming weeks.


Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

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