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Tough love plan could end California's unemployment insurance stalemate

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Tough love plan could end California's unemployment insurance stalemate

When the Great Recession struck California 17 years ago and hundreds of thousands of workers lost their jobs, the state’s unemployment insurance system crashed.

The employer-financed program quickly exhausted its thin reserves, due to a short-sighted political decision six years earlier.

In 2001, the Unemployment Insurance Fund had a $6.5 billion positive balance. But the governor at the time, Democrat Gray Davis, owed big political debts to unions that financed his 1998 campaign. He repaid them by doubling unemployment insurance benefits, contending that the seemingly hefty reserve could cover them without raising payroll taxes on employers.

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When recession struck, the insurance fund soon leaked red ink and the state borrowed about $10 billion from the federal government to maintain cash payments. When the state didn’t repay the loan, the feds raised payroll taxes for nearly a decade to retire the loan.

It should have been a lesson for political policymakers about instant gratification and financial responsibility, but it wasn’t.

Shortly after the $10 billion loan was paid off, California was hammered by the COVID-19 pandemic, and upwards of 3 million workers lost their jobs as the state ordered workplace closures.

Once again, the unemployment insurance program had virtually no reserves to cover the sharp increase in claims. Once again it borrowed from the federal government, this time for $20 billion, and once again its failure to repay forced the feds to increase payroll taxes.

In addition to a double dose of financial problems, the Employment Development Department has also experienced managerial failures.

In 2011 Elaine Howle, the state auditor, laid out the department’s shortcomings in a sharply worded report, but when the pandemic hit, they once again became evident. There were massive glitches in responding to legitimate claims for insurance benefits, while the department gave tens of billions of dollars to fraudsters.

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Meanwhile employers are still repaying the last loan, and the state’s insurance fund is continuing to run deficits, unable to cover current benefits of nearly $7 billion a year.

With that history in mind, another watchdog agency, the Legislative Analyst’s Office, is urging a complete overhaul of unemployment insurance, declaring the system “is broken.”

Noting that the current state payroll tax cannot fully cover current benefits, much less build reserves, the LAO report projects a “perpetually outstanding federal loan” to keep payments flowing that must be repaid with interest.

The report proposes a four-part tough love approach to a crisis that has been building for more than two decades and cannot solve itself, to wit it advises the state to:

  • Increase the taxable wage base from $7,000 per worker to $46,800, tying it to the actual benefits of up to $450 a week. It “would place California among the ten states with taxable wages bases above $40,000 and all other Western states.”
  • Adopt two payroll tax rates, one to cover current benefits and another to rebuild reserves. The combined rate of 1.9% would be applied to the $46,800 wage base.
  • Base employers’ tax rates on their changes in employment, thus imposing higher costs on employers that reduce their number of workers.
  • Refinance the federal loan with a bond backed by payroll taxes and state loans from its internal sources to reduce overall interest costs.

There may be other alternatives, perhaps affecting benefits, but the main thing is that doing nothing will just perpetuate this crisis — even though the politics of the issue are daunting.

It’s been a political stalemate for nearly a quarter-century, pitting unions seeking to protect, or even increase, benefits against employers who don’t want to shoulder increased taxes. Successive governors and legislative leaders have shunned engagement, preferring to kick the can down the road.

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See How Meghan Markle and Prince Harry Celebrated Easter in California With Their Children

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See How Meghan Markle and Prince Harry Celebrated Easter in California With Their Children


While the royal family gathered in Windsor this morning to attend Easter Sunday services, the holiday looked quite different in Montecito, California for Prince Harry, Meghan Markle, and their two children, Prince Archie and Princess Lilibet.

On Instagram, Meghan shared videos from their day, including feeding their chickens, gathering eggs, watching Archie and Lilibet race on an Easter egg hunt with their dogs following, Lilibet, in a pink dress, holding a large stuffed bunny toy while wearing bunny ears, and Archie working on decorating eggs. “Happy Easter!” she wrote in the caption . Watch the clips here:

In With Love, Meghan, Meghan spoke about collecting eggs from her chickens. “What’s really cool is with whatever’s going on in life, to be able to do something like this,” Meghan tells the camera about collecting eggs from her chickens. “It’s just fun. It’s fun for kids and for adults. But, if a morning starts like this [snaps], you think about your day differently.”

Harry and Meghan’s Netflix docuseries, Harry & Meghan, offered a sweet glimpse into their Easter traditions in California. In the sixth episode, cameras capture the Duke and Duchess of Sussex, along with Meghan’s mom Doria, as they set up an Easter egg hunt for Archie in April 2021.

Screenshot/Netflix

Meghan, pregnant with Lilibet, on Easter 2021.

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Screenshot/Netflix

Harry places an egg underneath a Peter Rabbit character.

prince harry meghan markle easter egg hunt netflix

Screenshot/Netflix

The Sussexes setting up an Easter egg hunt for Archie in their backyard.

On ShopMy last year, Meghan shared her Easter essentials, which included children’s clothing picks from J.Crew, Boden, and Petite Plume, among other brands, and Easter hosting items such as children’s toys and home goods. Earlier this week, she was spotted shopping for Easter gifts at a local Montecito shop. “She was there for a while, talking to the staff and making selections,” a source told People at the time.

In addition, last month, her brand As Ever launched a limited-edition “Bloom Box” in collaboration with High Camp Supply, a San Francisco-based luxury florist. The box was meant to ship in time for Easter.


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Emily Burack (she/her) is the Deputy Digital Editor for Town & Country, where she covers entertainment, celebrities, the royals, and a wide range of other topics. Before joining T&C, she was the deputy managing editor at Hey Alma, a Jewish culture site. Follow her @emburack on Instagram, Twitter, and other social media platforms.



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California Politics 360 Full Episode | $13M placed in bets on CA governor’s race

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California Politics 360 Full Episode | M placed in bets on CA governor’s race


Ashley Zavala sits down with Sacramento Assembly Member Maggy Krell about what more she says should be done.

California Politics 360 Full Episode | $13M placed in bets on CA governor’s race

Ashley Zavala sits down with Sacramento Assembly Member Maggy Krell about what more she says should be done.

California Politics 360 Full Episode | $13M placed in bets on CA governor’s race

Ashley Zavala sits down with Sacramento Assembly Member Maggy Krell about what more she says should be done.

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Updated: 8:25 AM PDT Apr 5, 2026

Editorial Standards

At least $13 million has been placed in bets on the California governor’s race. In a state that doesn’t allow online sports betting, why are people allowed to bet on politics? The two most popular betting and prediction sites – Kalshi & Polymarket – are facing a flurry of lawsuits. Last week, Washington filed a lawsuit against Kalshi. Last month, Arizona’s attorney general filed criminal charges against the company. This week, California Sen. Adam Schiff joined three other senators in proposing legislation to block insiders from betting. Gov. Newsom also made some moves on the state level, banning state employees or his appointees and their family members from making bets on these sites using state information. Ashley Zavala sits down with Sacramento Assembly Member Maggy Krell about what more she says should be done. This year, California voters will decide who they want to be their next governor. Every week leading to the June primary, we will hear from one of the top 10 candidates running for the state’s highest position. This week, Ashley Zavala sat down with Republican Steve Hilton to get his thoughts on the major issues impacting Californians. New changes went into effect this week, impacting who is eligible for CalFresh. Ashley Zavala sits down with the Executive Director of the County Welfare Directors Association, Carlos Marquez III. We take a closer look at the responsibilities for California’s Insurance Commissioner ahead of the June primary.KCRA 3 Political Director Ashley Zavala reports in-depth coverage of top California politics and policy issues. She is also the host of “California Politics 360.” Get informed each Sunday at 8:30 a.m. on KCRA 3.

At least $13 million has been placed in bets on the California governor’s race. In a state that doesn’t allow online sports betting, why are people allowed to bet on politics?

The two most popular betting and prediction sites – Kalshi & Polymarket – are facing a flurry of lawsuits. Last week, Washington filed a lawsuit against Kalshi. Last month, Arizona’s attorney general filed criminal charges against the company.

This week, California Sen. Adam Schiff joined three other senators in proposing legislation to block insiders from betting. Gov. Newsom also made some moves on the state level, banning state employees or his appointees and their family members from making bets on these sites using state information.

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Ashley Zavala sits down with Sacramento Assembly Member Maggy Krell about what more she says should be done.

This year, California voters will decide who they want to be their next governor. Every week leading to the June primary, we will hear from one of the top 10 candidates running for the state’s highest position. This week, Ashley Zavala sat down with Republican Steve Hilton to get his thoughts on the major issues impacting Californians.

New changes went into effect this week, impacting who is eligible for CalFresh. Ashley Zavala sits down with the Executive Director of the County Welfare Directors Association, Carlos Marquez III.

We take a closer look at the responsibilities for California’s Insurance Commissioner ahead of the June primary.


KCRA 3 Political Director Ashley Zavala reports in-depth coverage of top California politics and policy issues. She is also the host of “California Politics 360.” Get informed each Sunday at 8:30 a.m. on KCRA 3.

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Loved ones search for missing 15-year-old Southern California girl 

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Loved ones search for missing 15-year-old Southern California girl 


Loved ones are searching for a Southern California girl who has been missing for more than six months.

Keylin Reyes-Moreno, 15, was reported missing on Sept. 22, 2025, according to the National Center for Missing & Exploited Children (NCMEC).

Reyes-Moreno was last seen in the Pacoima area.

She is 5 feet 6 inches tall and weighs 120 pounds. She has brown hair and dark brown eyes.

Keylin Reyes-Moreno, 15, was last seen in Pacoima on Sept. 22, 2025. (National Center for Missing & Exploited Children)

She may have been heading to the Los Angeles area when she disappeared.

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Her family did not mention any health or mental issues that would’ve contributed to her disappearance. They have not heard from her since and are very concerned for her well-being.

Anyone who may know Keylin Reyes-Moreno’s whereabouts or has information on the case is asked to call NCMEC at 1-800-843-5678 or the Los Angeles Police Department at 877-275-5273.



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