National and state initial claims for unemployment insurance (UI) continued to decline last week. But, as Kriss’s charts show, they were still substantially higher than they were during the Great Recession. With last week’s report, the accommodation and food services and health services and social assistance sectors have had the highest number of initial claims since March 1. As a share of February employment, education services and arts, entertainment, and recreation have had the highest number of claims.

However, education services had a high number of claims during the period of time in which most of the fraudulent claims were filed. We still don’t know how many claims were fraudulent. Last week, the state auditor’s office announced that it will look into the fraud.

In preparation for a revenue shortfall, state agencies have been working to identify potential savings (as a drill, not an actual proposal), and the Office of Financial Management has started posting them here. Agencies were asked to find savings of 15 percent, but some budget areas were excluded, so the target savings amount would reduce FY 2021 spending by 6.8 percent. That would put 2021 appropriations 0.7 percent below 2020 levels, but still 8.9 percent above 2019.

Of the savings ideas that had been posted last week, several agencies said they would have to lay off or furlough staff. Another common idea was to forgo the 3 percent salary increase state employees will receive on July 1. The Seattle Times editorializes that the state should do so: “What Inslee should really do is declare a revenue shortfall so the state can reopen current labor contracts, as Gov. Gregoire did in 2010. Gregoire earlier tried furloughs, but they didn’t reduce spending enough.”

As I noted last week, statute specifies that existing collective bargaining agreements can be renegotiated if “a significant revenue shortfall occurs resulting in reduced appropriations, as declared by proclamation of the governor or by resolution of the legislature.” Appropriations have not yet been reduced. (Gov. Inslee did veto some new spending in the 2020 supplemental budget, but the budget still increased appropriations.) When then-Gov. Gregoire re-opened the CBAs in 2010, four budgets that reduced appropriations had already been passed and the governor had been forced to make across-the-board cuts due to a projected cash deficit. (See here for a timeline of events.)

Mark your calendars: on Wednesday, the state employment report for May will be released and the Economic and Revenue Forecast Council will adopt a revenue forecast.

Finally, we’ve added a page to our site to house all posts related to COVID-19.