FUTA receipts and funds returned to states, FY 2001–2002

Official letter (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2003/UIPL34-03.html):

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM
U.S. Department of Labor
Washington, D.C. 20210
CLASSIFICATION: UI
CORRESPONDENCE SYMBOL: OWS/DFAS
DATE: September 10, 2003

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 34-03
TO: ALL STATE WORKFORCE AGENCIES
FROM: CHERYL ATKINSON /s/, Administrator, Office of Workforce Security
SUBJECT: Comparative Data on Federal Unemployment Tax Act (FUTA) Receipts and Amounts Returned to States
RESCISSIONS: None
EXPIRATION DATE: September 30, 2004

1. Purpose. To provide tables for Fiscal Years (FY) 2001 and 2002 showing estimated FUTA receipts attributable to employment in each state and the amounts of FUTA funds provided to each state for program administration and benefit payments. Cumulative totals for FY 1981-2002 are also included.

2. References. Unemployment Insurance Program Letter (UIPL) No. 24-98, UIPL No. 24-98, Change 2, and UIPL No. 24-98, Change 4.

3. Background. This UIPL provides data for FY 2001-02 and a cumulative table for FY 1981-2002. Data for earlier years can be found in UIPL No. 24-98 (FY 1981-93), UIPL No. 24-98, Change 2 (FY 1994-96), and UIPL No. 24-98, Change 4 (FY 1997-2000). When comparing FUTA receipts and amounts returned, it is important to note that postage costs (prior to 1997) and National Activities expenditures are not reflected in the state data. These total approximately $2.7 billion for the FY 1981-2002 period and reduce the apparent proportion of FUTA receipts returned to states.

4. Action Required. Please distribute to appropriate staff.

5. Inquiries. Direct inquiries to the appropriate Regional Office. Data may be obtained in computerized format by contacting Mike Miller of the National Office at 202-693-2930 or [email protected]. Data are also available on the Office of Workforce Security Web site (https://ows.doleta.gov) under "Budget."

6. Attachments. FUTA Receipts vs. Amounts Returned: Column Definitions; Explanatory Notes; Annual Tables.

Official Attachment I, Column Definitions (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2003/UIPL34-03_AttachI.html):

FUTA RECEIPTS VS. AMOUNTS RETURNED

Estimated FUTA

Total -- Estimated total FUTA receipts (excluding reduced credits).

General Fund Repayment -- The share of receipts transferred from the EUCA to repay loans incurred for federal benefit payments prior to 1981. These repayments were made in FY 1981 through FY 1987.

Implied Net FUTA -- This column represents total FUTA receipts minus the General Fund Repayment and applies only to FY 1981 through FY 1987.

EUCA -- Share of receipts transferred to the Extended Unemployment Compensation Account. For FY 1999-01 and part of FY 2002, no receipts were transferred because EUCA was at its ceiling.

FUA -- Share of receipts transferred to the Federal Unemployment Account. This applies to FY 1988 through FY 1991 only.

ESAA -- Share of receipts retained in the Employment Security Administration Account.

Administrative Costs

UI -- State administrative costs for Unemployment Insurance, excluding postage and a portion of National Activities.

ES -- State administrative costs for Employment Services, excluding postage and a portion of National Activities. ES fiscal year data are estimated from program year data and adjusted for the general revenue share of ES funding (approximately 3 percent of the total).

Other -- Includes veterans employment programs and Bureau of Labor Statistics (BLS) Labor Market Information programs. Data include postage starting with 1997.

Total -- Total administrative costs. All administrative cost data are federal obligations.

Reed Act Distribution -- Distribution of excess federal account balances or other distribution from the federal accounts.

Benefits Paid

Fed Share EB -- Federal share of Federal-State Extended Benefits. Also includes shareable regular benefits.

EUC/TEUC -- The estimated amount of Emergency Unemployment Compensation and/or Temporary Extended Unemployment Compensation benefits funded from FUTA receipts.

Total to State -- Total FUTA funds returned to the state.

Official Attachment II, Explanatory Notes (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2003/UIPL34-03_AttachII.html):

FUTA RECEIPTS VS. AMOUNTS RETURNED

Administrative Grants

• Some EUC administrative costs funded from general revenues are included in the state data. These total $43 million in FY 1992 and $217 million in FY 1993.

• FY 1998 and FY 1999 UI Administrative Grants included funds to help states identify and correct year 2000 computer problems.

• There are several items that are appropriated as state administration but are not included in the state data. These include postage costs before 1997, ES National Activities, and a portion of UI National Activities. Annual totals for postage and ES National Activities are shown below. Comparable annual data for UI National Activities are not available, but the total amount for FY 1981-2002 that is not reflected in the state data is approximately $79 million.

FUTA Estimates

• Since actual data on FUTA receipts by state do not exist, they are estimated using wage and employment data from the BLS ES202 report. Receipts are estimated by first estimating calendar year FUTA taxable wages and then multiplying by the effective tax rate (0.7% through CY 1982, then 0.8%). Calendar year estimates are then converted to fiscal year based on quarterly receipt patterns.

• The sums of the state estimates do not match yearly totals reported by the Internal Revenue Service (IRS) or amounts deposited in the Unemployment Trust Fund because of IRS reporting problems for some years and the fact that deposits were based on estimates from 1986 to 1992, with large adjustments in 1989 and 1992. Also, state estimates do not reflect uncollected taxes or penalties and interest.

Official Attachment III, Annual Tables (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2003/UIPL34-03_AttachIII.xls):

All amounts are in millions of dollars, displayed to one decimal place as in the official workbook. Blank cells are blank in that workbook.

FY 1981–2002 cumulative

FY 2002

FY 2001