California's Unemployment Insurance Fund will end the year with a $21.7 billion debt to the federal government that will continue growing through 2025, according to the latest Unemployment Insurance Fund forecast from the Employment Development Department. The debt triggers an automatic tax increase on employers. The EDD's report stated that the debt triggered a $396 million tax increase on employers in 2023, projected to increase to $812 million this year " a cumulative $1.2 billion tax hike for just those two years. California's UI Fund, responsible for providing financial assistance to unemployed residents, has faced financial challenges since the onset of the COVID-19 pandemic. The fund ended 2019 with a $3.3 billion surplus, but that reserve was quickly depleted due to a sharp rise in unemployment associated with the pandemic and government-mandated business closures.