The Virginia Small Business Commission met on December 1, 2020 to receive an update from the Secretary of Commerce and Trade on Virginia’s Unemployment numbers.
Virginia’s Unemployment Trust Fund is out of money and continues to operate through a federal loan. The trust fund, which had capital reserves of more than $1.4 billion prior to the pandemic, entirely depleted those state funds over the past 10 months. The Virginia Employment Commission projected back in July that the trust was likely to run a deficit. At the beginning of October, the VEC warned that it would run out of money within a week.
Continued unemployment claims have steadily declined since May. During the filing period that ended Nov. 21, claims totaled 81,138—a 4.7% decrease from the previous. However, that’s 63,597 higher than the 17,541 continued claims from the comparable week last year.
Ball said the state is currently in conversations with the federal government about potentially converting those loans to grants. That way, the state would not have to repay the money and Virginia small businesses would not see an increase in their payroll taxes. But that’s not guaranteed.
Commission members asked if the governor’s office had any solutions in mind. Ball said no. Short of a huge infusion of cash, he added, there are very few solutions to the VEC’s budget shortfall. During public testimony, NFIB Virginia State Director Nicole Riley pointed out the Governor and General Assembly could appropriate state general fund dollars to shore up the trust fund to help decrease the impact of higher payroll taxes.