Note that State unemployment systems are funded through taxes on employers, who pay based on the number of workers they have and their history of laying them off. The systems are set up as trust funds, building up reserves during good times and drawing them down during recessions.
Recently, a growing number of states have cut back their regular, non-emergency benefits below the long-standard level of 26 weeks. Those favoring cutbacks cite big debts accrued by unemployment systems during the recession. Paying off those debts usually requires states to increase taxes on employers, which business groups and others fear could deter hiring. Cutting benefits is one way to reduce costs and pay down those debts more quickly.
