State jobless benefits reserves low (More than a dozen states would be hard-pressed to provide benef

[Omaha Steve]

http://www.stateline.org/live/printable/story?contentId=314123

Monday, June 02, 2008
State jobless benefits reserves low
By Pamela M. Prah, Stateline.org Staff Writer

More than a dozen states would be hard-pressed to provide unemployment benefits if the economy tailspins into a full-blown recession and more workers get pink slips.

Michigan, Missouri, New York and Ohio could face the biggest problems since the amount of money in their unemployment insurance reserves already are far below recommended levels while another 14 states could join this group if the job slump deepens.

“There is no cause for panic, but the situation is fairly worrisome,” said Andrew Stettner, deputy director of the National Employment Law Project, an advocacy group for the rights of low-wage workers, headquartered in New York City.



One way economists determine whether a state trust fund is solvent is if it has enough money to make unemployment insurance benefit payments for at least one year without collecting any additional revenue. These four states have just a few months of reserves.

If a state unemployment insurance trust fund runs out of money, unemployed workers would still get their benefits, but the state would have to borrow the money from the federal government and pay it back with interest. Such a scenario would burden those states that are already cash-strapped and borrowing heavily to balance their budgets without having to raise taxes.

“Obviously, states are looking at increased pressure concerning their state unemployment trust funds,” said Sujit CanagaRetna, a budget expert with the Council of State Governments.

FULL story at link.

[Deja Q]

1. Wow. Florida is doing good, yet other Republican-ran states are really in the toilet...

:wow: