19 states’ unemployment funds insolvent or nearly broke
It’s not just consumers and corporations struggling through the newly acknowledged recession. The National Conference of State Legislators (NCSL) is sounding serious alarm bells about the states’ unemployment trust funds being drained dry and quickly.
Economic woes are hitting 19 states especially hard who have less than the recommended 12-months of unemployment trust fund reserves by which to pay jobless benefits. Michigan, which has the highest unemployment rates in the nation, has no reserve; neighboring Indiana has a single month in the bank. Meanwhile, Louisiana boasts a best-in-the-nation 94 months of financial backup to its current unemployment benefit outlays.
While Colorado’s unemployment rate has been creeping up — and spiked another 3/10ths of 1 percent last month, over the figures reported by NCSL, to 5.7 percent — the state’s trust fund is in better shape than most.
According to the analysis, Colorado has a healthy 24 months of reserves in place to cover its obligations to jobless workers, placing it at No. 21 or just above the mid-point among the other 50 states, Puerto Rico and the Virgin Islands.
The state’s need to dip into the trust account is expected to grow, however, with both a new pack of laid-off workers last month and another extension of unemployment benefits for up to an additional seven weeks for about 11,000 Coloradans who had recently exhausted their unemployment assistance.
Should a state unemployment trust fund actually run out of money, the agency would have to apply for a loan from the federal government — cold comfort but a sad irony in light of the current Wall Street versus Main Street financial bailout arguments.
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