The state had borrowed $348 million in April and nearly $1.1 billion in early May, according to US Department of Treasury and Department of Labor data. But the balance is now $0, according to the federal agencies.
California was able to pay back the loan with revenue from employer-paid taxes to cover unemployment, said a state Employment Development Department spokeswoman.
“With this being the highest period for receiving annual employer contributions, we will continue to bounce up and down with solvency for a little while until the contributions slow down and benefit payments outpace that revenue on a more permanent basis,” she said.
The department has requested authority to borrow up to $10 billion between April and June. It only draws down what it needs at any given time and will not pay interest on any loans in 2020, thanks to a coronavirus relief bill Congress passed in mid-March.
However, the state is projecting that unemployment benefits will total $43.8 billion for the 2020-21 fiscal year, which begins July 1, up from its original $5.8 billion estimate. They payments will be primarily supported by federal funding, federal loans and employer taxes.
Federal and state spending on unemployment benefits totaled just under $126 billion, as of May 19, up from $12.7 billion at the beginning of March, according to Treasury Department data.