But that metric conceals the increasingly bleak reality for the state’s workers. An increase in public sector jobs by many debt-burdened local governments and the state helped offset some of the decline. Unemployment Insurance StrainedEven before COVID-related layoffs took a financial toll on California’s unemployment insurance program, its fund was already operating at a deficit after being underfunded for years. Last December, the office projected that the state unemployment program would operate at a $2 billion deficit each year from 2025 to 2030. Now the burden of that loan shifts to employers since the state failed to repay the debt within two years.