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State Burns Through Unemployment Cash

February 6th, 2009 by Mike Vasilinda

Florida went through more than a billion dollars in the last year paying unemployment benefits to a growing number of people. The fund still has cash, but as Mike Vasilinda tells us, employers will likely have to dig deeper to keep the fund solvent.

Hear it Here: State Burns Through Unemployment Cash

Floridas Unemployment Fund is burning through cash. It started last year with 2 point 2 billion. The Agency for Workforce Innovation says it has less than half that much left.

Theres more than a Billion dollars in the trust fund right now. Its Absolutely [enough], were in no danger of running out of money or insolvency.

An automatic trigger to raise the rates paid by employers should keep the fund from going broke. But without that trigger, the fund would be out of cash by the end of the year. Its still going to be close.

There are two factors at work. There are more people collecting unemployment and theyre collecting it longer.

Benefits have been extended from 26 to a maximum 59 weeks. Economists predicted Floridas unemployment rate wouldnt hit 8.1 percent until August. It hit the mark in December.

Willie Bradshaw is barely making ends meet, even with the checks.

No thats not enough to get by, Bradshaw said. I struggle day-to-day to make it.

How much more employers will have to pay wont be calculated until June. How many layoffs theyve had, the salaries the pay, and the balance in the fund will all be part of the calculation.

The hike for employers is almost certain. The fund balance missed the trigger point for a rate hike this past June by just over half a million dollars.

Posted in Economy, State Budget, State News, Unemployment | No Comments »

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