Sunday, January 11, 2009
Idaho's Unemployment fund could run dry in 2010
This story is from MSNBC
Rising jobless claims draining state unemployment fund
updated 7:45 p.m. ET, Sat., Jan. 10, 2009
BOISE -- Unemployment claims are piling up at the Idaho Department of Labor as more layoffs are announced across the valley.
That’s one big reason Idaho lawmakers are expecting a lot of difficult choices when the 2009 session begins next Monday.
One of the biggest questions yet to be answered is whether there will be enough money to sustain the unemployment fund.
For the past several months the Department of Labor has been a busy place as more and more companies resort to layoffs in this bad economy.
And now that is really putting pressure on the state's unemployment fund.
In less than one year, unemployment in Idaho rose three percent.
Labor Department spokesman Bob Fisk says in 2008 they paid out twice the amount they took in to the unemployment fund. That's why the source that supplies the fund got hit with a tax rate hike.
"The tax rate on employers went up 70 percent in 2009 after declining in 2007, and ‘08 to the lowest point it has ever been," said Fick.
But Fick expects that tax rate hike won't be enough to help sustain the unemployment fund through 2010.
Just last week the state doled out $9 million to unemployed Idahoans.
"This economic slide has been so precipitous that the fund will continue to pay out much more than it takes in and 2009," said Fick.
In late 2007, the fund was at $320 million, but Fick projects it will be down to about $20 million by 2010.
That's why he is happy to hear the Legislature is planning to take a look at the situation this session.
"The most important thing that they make sure the way is clear for the department to get the bridge loan from the federal government to get us through the rocky spot, the first part of 2010," said Fick.
"If he says that’s the case I have full confidence he is concerned and we need to be working together with our Department of Labor to make sure we can take care of those needs," said Senate President Pro Tem Bob Geddes.
It's just one of many economic issues legislators will tackle beginning Monday.
"It’s going to be a tough legislative session,” said Geddes.
Fick says the fund was revised by the Legislature in 2005 and it’s designed to stay solvent.
He says Idaho in comparison to other states is still doing OK, while two or three states have already been forced to borrow from the federal government.