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Unemployment Compensation Fund Running Dry

June 16th, 2009 by flanews

The state is burning through money to pay unemployment claims. There is 534 million dollars in the unemployment compensation trust fund but the state is paying out 65 million dollars a week. As Whitney Ray tells us, the fund could be dry by August and the state will have to borrow money from the federal government to pay claims.

With nearly a million Floridians out of work, the states ability to pay unemployment claims is wearing thin. By August the unemployment compensation fund will run dry and the state will have to borrow money from the Federal government to pay claims.
There will be no lapse in benefits. Everyone will receive their benefits who is entitled to them, said Robby Cunningham with the Agency for Workforce Innovation.

Uncle Sam isnt the only one coming to the rescue. Florida Businesses will also be paying higher taxes to help replenish the fund. The Florida Chamber of Commerce supports the tax increase because it puts money into the hands of consumers.

The good news here is that for every one dollar in unemployment compensation benefits paid out to Floridians, $1.64 comes back to our states economy. So were going to see small businesses benefit from claims that are paid out, said Dan Krassner, a spokesman with the Florida Chamber of Commerce.

The states ability to pay claims could have been strengthened during session. Lawmakers left nearly half a million federal stimulus dollars on the table that could have been used to pay unemployment claims.

House Democrats are furious legislative leaders didnt take the money.

There was no reason to leave 400 million dollars on the table. There is no reason to allow the unemployment funds to just evaporate and run out. Thats wrong. Thats immoral. Thats disgraceful, said House Democrat Marty Kiar.

Lawmakers turned down the free federal dollars, and the state will borrow the money and pay it back. Fifteen other states are already receiving money from the Federal Unemployment Compensation Trust Fund. The money is interest free until January of 2011.

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