Today with bipartisan support, the Minnesota Senate passed legislation that pays off the state’s $1.2 billion in Unemployment Insurance (UI) debt and refills the fund to protect employees’ benefits. 

This legislation, authored by Senator Eric Pratt (R-Prior Lake), focuses on paying the debt and replenishing the depleted fund. The UI Trust Fund balance was $1.7 billion in January 2020, but unemployment insurance claims during the pandemic drained the fund to a negative balance of $1.2 billion. Since then, Minnesota has accrued over $8 million in interest alone to the federal government on the debt—the state is paying over $50,000 a day alone on interest charges. The $2.73 billion in appropriations from SF 2677 would pay off the debt and interest owed to the federal government and also replenish the trust fund to sufficient levels. 

“This is an important bipartisan measure that pays off the debt owed to the federal government, pays off the interest, and replenishes the UI trust fund reserves so employees do not lose access to this important benefit,” said Sen. Pratt. “Every dollar spent from this fund went to working Minnesotans— these funds were used to support Minnesotans when they suddenly and unexpectedly lost their jobs throughout the pandemic, and we repeatedly assured business owners that they would not be held accountable for this. Other states have paid the debt, and it’s time for us to do the same. This burden should not fall on the shoulders of small businesses and their employees.”

According to DEED, it would take over 10 years of additional higher taxes on businesses to replenish the UI trust funds. This bill ensures Minnesota’s UI trust fund will once again reach an adequate level of funding and will protect small business from being penalized via higher federal taxes.