|
|
||
Unemployment fund will be broke by the end of the year; stimulus money will have little effect Date published: 6/7/2009
BY CHELYEN DAVIS
Federal stimulus money for unemployment has become a hot political topic in Virginia. But despite all the rhetoric, the money would last Virginia only about five weeks and do little to stave off a projected shortfall in the unemployment fund. And unemployment taxes paid by employers are expected to go up, no matter whether Virginia gets the stimulus money or not. According to Virginia Employment Commission research director Don Lillywhite, the fund from which unemployment benefits are paid is expected to go dry by November or December of this year. That's because, as unemployment numbers have spiked in this recession, the fund is now paying out about $100 million a month in benefits. That's roughly $25 million a week; a year ago the fund was paying out $6 million to $8 million a week, Lillywhite said. The result will be an increase in unemployment taxes on businesses, and probably borrowing from the federal government. "It is anticipated we will borrow many millions of dollars," Lillywhite said. Other states will be in the same spot--Lillywhite said about 15 states are already having to borrow federal money to cover unemployment benefits. The unemployment fund is filled by taxes employers pay, currently an average of $95 per employee per year. As of 2010, it will be $165 per employee on average. Lillywhite said that as the solvency of the unemployment fund goes down, employer taxes go up, an increase that's defined in the state code. The fund is considered solvent at a balance of about $1 billion, Lillywhite said; it's projected to have a balance of just $349 million by the end of this month, which also ends the fiscal year. The last time the fund went dry was 1982, Lillywhite said. "This is one of the few times that we're not able to sustain ourselves through a terrible recession," he added. Currently, Lillywhite expects the unemployment fund to become insolvent around the end of this year, and the state will have to borrow money till it becomes solvent again in 2012, according to current projections. Unemployment taxes on businesses would increase each year, and wouldn't start going back down until 2013 under that scenario, Lillywhite said.
Date published: 6/7/2009
as inflation begins to spike and interest rates rise. Obama's plan hurt, it never helped.
If you take the Feds money, you assume a whole lot more liability (part timers and those in school). That liability will be here long after Fedzilla stops buying votes. This is the little messiah's way of forcing welfare down our throats. No thanks!
the lillywhite stimulass. just kiss it.
Hey FLS - shouldn't this go in your "Bringing it Home" series that exalted the wonderful Obama/Pelosi stimulus?
|
|
||||||||||||||||||||||
