HARRISBURG -- Pennsylvania is among 30 states that risk running out of money to pay unemployment benefits, according to an organization of state administrators who oversee unemployment insurance laws.
"The economic climate is a really painful one," Ingrid Evans, a spokeswoman for the National Association of State Workforce Agencies, said Monday.
Chuck Ardo, a spokesman for Gov. Ed Rendell, said the Unemployment Compensation Fund won't be threatened before spring.
There will be enough left in the trust fund "for several months' worth of benefits" by the end of December, said Barry Ciccocioppo, another Rendell aide.
Pennsylvania this year has paid out more than $2.8 billion in unemployment benefits, up from $2 billion last year, an increase of 42 percent, according to the state Department of Labor and Industry.
Barney Oursler, co-coordinator of the Homestead-based Mon Valley Unemployed Committee, said the trust fund drying up would exacerbate the effects of the recession.
"If the unemployment checks run out, then it's even a much bigger disaster," Oursler said.
When that happens, the Legislature usually steps in and tries to find new sources to replenish the fund.
"Then they struggle over whether to put it on the backs of companies or on regular people," Oursler said.
Options for replenishing the trust fund include raising the amount employers and employees pay into it, slashing the benefits and borrowing money, Ciccocioppo said.
When the fund ran low in 2004 and 2005, officials borrowed money from other state funds, Ciccocioppo said.
Indiana and Michigan are borrowing money from the federal government to keep paying benefits to their residents who have applied for unemployment assistance, Evans said.
Pennsylvania's unemployment rate jumped 1.4 percentage points this year to 5.8 percent, which is still below the national rate of 6.7 percent.
Unemployment compensation claims have increased about 12 percent in the past year, state Labor and Industry figures show.
The most recent peak for Pennsylvania's trust fund was $1.8 billion. It will be about $1 billion by the end of December, according to the governor's office.
Pennsylvanians may collect up to 26 weeks of unemployment benefits and apply for 13 weeks of extended benefits from the federal government.
No comments:
Post a Comment