Monday, December 22, 2008

Delaware's Unemployment Insurance Fund Declining, but still OK

From the Delmarva media group:

Del. unemployment fund runs low

By Eric Ruth
The News Journal

When times are good, Delawareans have plenty of jobs, the jobs create plenty of tax revenue, and the state's unemployment insurance fund is fat, happy and maybe a little lonely.

But months of economic decline have depleted Delaware's reserves for unemployed workers -- and simultaneously diminished the means of replenishing it. The steady drawdown of cash may eventually demand a remedy that could one day mean higher taxes on employers, or lower benefits for jobless workers.

The state's unemployment insurance fund, while shrinking, is still in better shape than most states', and officials are cautiously optimistic that the economy will turn around before drastic action is needed.

"The economic cycle reversed itself" the last time the fund was declining in 2002-2003, said Tom MacPherson, director of the state Division of Unemployment Insurance. "At some point in time, there will be a rebound."

That's a hope that has been proved wrong here in the past, however. And it's a situation that is occurring with more frequency across the nation as layoffs rise.

Nineteen states have less than the recommended year of reserves to pay benefits, and four states are down to one to three months, according to U.S. Department Labor data. Michigan has run out of money and borrowed from the federal government.

Read the rest of the story here.

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