Last year, the fund paid out almost $2.6 billion to unemployed Oregonians, department spokesman Craig Spivey said.
“We’re looking at about 26 states across the country (whose systems) are currently bankrupt or about to be bankrupt,” he said.
California’s trust fund, for example, is $7 billion in debt, Spivey said.
By contrast, “Oregon is one of the most solvent trust funds in the country,” he said. “We’re looked at as a model.”
Back in the mid-1970s, the Oregon Legislature set up a “self-balancing” unemployment insurance trust fund, fueled by employer payroll taxes, Spivey said.
Today, “our trust fund is sitting at a little over $1 billion,” he said.
To keep the fund solvent, the state Employment Department notified employers in November that their payroll tax rates for 2010 would increase.
Under Oregon law, the Employment Department uses a specific formula each August to figure out how much must be collected in the coming year to keep the fund sound.
Oregon uses eight tax schedules to make annual adjustments in employer tax rates, based on how healthy the trust fund is. Each schedule has a range of tax rates, with employers with the most unemployment insurance claims paying the highest rate.
This year, the state is using Tax Schedule 6. Oregon employers will be charged an average rate of 2.76 percent of the first $32,100 paid to each employee. Tax rates in Schedule 6 range from 1.8 percent to 5.4 percent, the department said.
The tax rate for new employers is 3.1 percent, up from 2.4 percent, the department said.
“The good news is we’ve been able to hold it (the increase) to Schedule 6 and not gone all the way up to Schedule 8. Our goal is to keep that solvency,” Spivey said.
— Sherri Buri McDonald
