RICHMOND, Va. (WRIC) — Gov. Northam today announced that Virginia would use $862 million in funding from Pres. Joe Biden’s American Rescue Plan to replenish Virginia’s Unemployment Insurance Trust Fund.
He also pledged $73.6 million in ARP funding to modernize the embattled Virginia Employment Commission, which faces criticism and lawsuits over delayed benefits.
In a press release, Northam said the move would be a boon to Virginia businesses as well as those receiving benefits.
“Shoring up the Commonwealth’s unemployment insurance trust fund is a smart investment that will prevent Virginia businesses from paying higher taxes and allow our economy to continue surging,” said Northam.
Unemployment benefits are drawn from the Unemployment Insurance Trust Fund, which is maintained by payroll taxes. When demands on the fund increase – as they did during the surge of unemployment following COVID lockdowns last year – those taxes are automatically raised.
That is, unless the fund receives a cash infusion.
“While Virginia’s unemployment rate has now fallen to half of what it was last summer, the past year’s claims depleted the Unemployment Insurance Trust Fund,” said Senate Majority Leader Dick Saslaw (D-Falls Curch).
The administration also prioritized modernization of the VEC, committing funds to increase call center capacity and overhaul the commission’s outdated computer systems.