Hawkeye Reporter

Despite paying $240 million in unemployment claims since mid-March, the State of Iowa isn’t seeking a federal loan to replenish its unemployment trust fund.

“(The) fund is sufficiently healthy to make such a loan unnecessary at this time,” Iowa Workforce Development Director Beth Townsend said in an email to the Des Moines Register.

Prior to the COVID-19 pandemic, the U.S. Department of Labor ranked Iowa’s unemployment trust fund among the top 20 healthiest funds in the country and determined the state would be able to survive a recession lasting up to 18 months. Now, given the fact that Iowa has almost reached the amount of unemployment claims it paid last year in just seven weeks in 2020, outside analysts expect the state to run out of funds very soon.

“Claims have risen so dramatically,” Tax Foundation’s State Tax Policy Director Jared Walczak said in an email.

Walczak predicts that Iowa’s trust fund, which consisted of $1.05 billion as of May 8, could be depleted within 12 weeks. According to KIWA Radio, Iowa is currently providing unemployment benefits to more than 180,000 individuals.

The U.S. unemployment rate has reached a level not seen since the Great Depression era. ABC News reports data from the U.S. Bureau of Labor Statistics reveals that the unemployment rate was 14.7% in April with the economy experiencing a loss of 20.5 million jobs. The national unemployment rate was previously at a historic low of 3.5% in February.

“Every single state is going to run out of money, no matter how hard they try,” Michele Evermore, a senior policy analyst at National Employment Law Project, said. “States are just going to borrow from the trust fund. As bad as this crisis is, I can’t imagine the feds aren’t going to step in and provide some sort of relief.”