As was true in many other states, Virginia's Unemployment Trust Fund was severely impacted by the 1975 recession. In 1974 Virginia had over $245 million in its Fund. This exceeded 2% of the total wages paid in 1974, a healthy condition by almost any standard. In both actual and comparative terms, the benefits Virginia paid out increased immensely, from $17 million in 1973, to $32 million in 1974, to $147 million in 1975. In addition, benefit payments continued at nearly $100 million per year from 1976 to 1979 and have since risen to nearly $170 million.

On the other hand, contribution payments have not increased nearly enough to match these increased benefit payments, and the Fund balance has not been returned to its previous sound position of the early seventies. Fund insolvency by the end of March, 1981, has been perceived as a real possibility.

The Joint Subcommittee Studying the Virginia Unemployment Trust Fund was established pursuant to Senate Joint Resolution No. 133 of the 1977 General Assembly.