NASHVILLE – Tennessee’s unemployment compensation trust fund paid out a quarter billion in jobless benefit claims during April to workers idled during the coronavirus pandemic as pressures mount on a once-$1.2 billion pool that was already below federally recommended solvency levels.
A total $226.4 million in additional funds flowed out in April in the form of state payments to hundreds of thousands of Tennesseans without work, according to state Department of Labor and Workforce officials.
An April 4 projection from the nonpartisan Tax Foundation estimated Tennessee’s fund could last 16 weeks before running out of money based on a combination of its 2020 solvency level as well as initial and continuing claims.
If the fund runs dry, it would force the state to seek a loan from the federal government or face raising unemployment tax rates on businesses already slammed by the coronavirus’ economic impact. And because Tennessee falls below the U.S. Department of Labor’s recommended funding balance, the state would have to pay interest on any loans it gets from Uncle Sam.
The Tax Foundation ranked Tennessee’s trust fund at No. 26 among the 50 states and the District of Columbia. Georgia’s is rated even worse, with the state ranked No. 40 as of April 4 with 11 weeks before problems could arise.