Many states face problems with unemployment compensation funds
Washington, D.C., United States (AHN) – The nation’s jobless economic recovery has kept workers who lost their jobs on unemployment compensation longer, draining state coffers and leading many states to consider curbing benefits.
When state unemployment funds ran dry, many states had to borrow money from the federal unemployment compensation fund. About 32 states owe the federal fund a combined $45.7 billion, with California alone owing nearly $10 billion of that amount. The interest states pay on that debt runs about $1.4 billion per year.
States face having to increase their tax on employers in order to continue to issue checks to jobless workers as well as to repay the federal government or merely pay interest on what they already owe.
Jobless workers in hard-hit Florida, where the unemployment rate remains stubbornly high at 11.9 percent, 3 percent over the national average, might soon have additional challenges.
The Florida House of Representatives passed a bill that would decrease the amount of unemployment taxes employers pay, as well as cut benefits to unemployed workers.
The bill would keep the maximum benefit amount at $275 but cut the maximum number of weeks a worker could collect from 26 to 20 weeks. In addition, if employment falls below 5 percent workers could only collect benefits for a maximum of 12 weeks with additional weeks added for every 0.5 percent increase in the unemployment rate.
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