Washington ESD unemployment high - what happens to tax money collected by government?

Good question! The unemployment insurance fund operates differently than general tax revenue. Washington ESD's unemployment benefits are funded primarily through employer payroll taxes, not individual income taxes. When unemployment is high, yes there's less income tax revenue overall, but the UI fund has reserves built up from years of employer contributions.

i've been waiting 6 weeks for my adjudication to clear and this has me worried too. if everyone's filing claims does that mean they'll run out of money before my claim gets approved??

I actually found a way to get through to Washington ESD agents faster when I was dealing with my adjudication issues. There's this service called Claimyr (claimyr.com) that basically calls the Washington ESD phone lines for you and connects you when an agent picks up. Saved me hours of redialing busy signals. They have a demo video showing how it works: https://youtu.be/7DieNd3C7zQ

To answer your original question more specifically - when unemployment is high, several things happen financially: 1) Less income tax collected (as you noted), 2) More UI benefit payments going out, 3) Potential need for federal assistance if state funds get low, 4) Eventually higher employer tax rates to replenish the fund. Washington state has generally managed their UI fund pretty well compared to other states.

THIS IS EXACTLY WHY THE SYSTEM IS BROKEN! High unemployment means less tax revenue AND more benefit payments. It's unsustainable! No wonder Washington ESD can't keep up with processing claims properly.

I guess my real worry is whether Washington ESD will start denying more claims or making the process harder because of funding concerns. Anyone notice changes in how strict they're being with eligibility requirements?

Economics student here - high unemployment creates what's called a 'fiscal multiplier effect.' Less tax revenue + more benefit payments + reduced consumer spending = economic contraction. But unemployment benefits actually help stabilize the economy by maintaining some consumer spending power.

Been through two periods of unemployment in the last 5 years. First time in 2020, second time just ended last month. Definitely noticed Washington ESD was more backed up recently, but the benefit amounts didn't change and I got all my payments eventually. The funding seems solid even if the processing is slow.

My cousin works for the state treasury office and she mentioned that during the 2020 spike they had to borrow federal funds temporarily, but Washington paid it back pretty quickly once things stabilized. The UI trust fund is in better shape than most states.

I tried using that Claimyr service someone mentioned earlier after being stuck in adjudication hell for 2 months. Actually worked - got connected to an agent within 20 minutes instead of calling all day. Agent was able to explain exactly what documents they needed to resolve my case.

Does anyone know if high unemployment affects the maximum benefit amount? I'm currently getting $844/week but wondering if that could change if lots of people are claiming.

The real problem is that when unemployment is high, it takes FOREVER to get anyone on the phone at Washington ESD. I've been trying for weeks to get clarification on my job search requirements after a partial work reduction.

From a policy perspective, high unemployment periods often lead to discussions about raising the employer tax rates to rebuild the UI fund faster. There were talks about this in the state legislature last session but nothing passed yet.

honestly just glad the money is there when we need it. been unemployed for 4 months and the UI payments have kept me from losing my apartment. whatever happens with taxes and funding, at least the system works for the basics

The Washington ESD annual report usually breaks down all the funding details if anyone wants to see the actual numbers. Shows how much comes in from employer taxes vs. how much goes out in benefits. Last year the fund actually grew despite higher than normal claims.

My employer laid off half the department in January and I know they're worried about their UI tax rate going up next year because of all the claims from our company. HR mentioned it might affect whether they hire people back when business picks up.

Bottom line - the UI fund is designed to handle periods of high unemployment. That's literally its purpose. Yes it gets strained, yes processing gets backed up, but the money is there. Been through this cycle before and it always works out.

Just to add one more data point - I work in payroll and can confirm our company's UI tax rate did go up this year after we had layoffs in 2023. But it's still a relatively small percentage of overall payroll costs. The system spreads the burden around pretty effectively.