The Employment Development Department (EDD) indicated that California's unemployment payouts have dropped from $2 billion to $1 billion since June 2010. Two factors that caused California's unemployment payouts to drop are:
- The decreasing number of unemployed people, and
- California's inability to meet the federal eligibility requirement for the maximum 99 weeks of unemployment benefits.
Based on EDD recent reports, the number of unemployed people in California has decreased from 2.26 million in June 2010 to 2.19 million in June 2011.
Despite the decrease in unemployment numbers, the main reason for the decrease in unemployment payouts was the cutting-off of benefits to long-term unemployed individuals. As of September 2012, Congress will further the cut the time-limit to received unemployment benefits to 72 weeks. This new time limit will reduce the number of people receiving aid, and will require several people to use up their unemployment benefits in the upcoming months.
Although California will have less unemployment payouts, this should have little effect on California's $10.2 billion deficit in its unemployment insurance trust fund. Because of this deficit, California was forced to borrow funds form the federal government. Since last year, California has been paying back the federal loan plus interest from the California disability insurance trust fund, which will have to be repaid within the next four years.