Las Vegas Sun

February 12, 2012

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Nevada jobless trust fund nearly broke

Fund that pays benefits to out-of-work residents drying up in fall

By Cy Ryan (contact)

Monday, Aug. 3, 2009 | 5:03 p.m.

Sun Coverage

CARSON CITY – The trust fund that pays benefits to more than 123,000 jobless Nevadans will be broke by the end of September or early October.

To address the shortfall the state will have to borrow $100 million a month from the federal government, state officials told lawmakers Monday.

Things don’t look much better in the near future, officials said. Cindy Jones, director of the state Employment Security Division, said the state has paid out $1.1 billion so far this year in unemployment benefits. Nevada was “well poised” in the health of its trust fund at the beginning of this economic downturn, Jones said. It had a reserve of $806 million and it’s now down to $70 million.

Assemblyman Joe Hardy, R-Boulder City, said “employers are going to be hit with a higher assessment than ever before.”

Employers are taxed on job experience or the rate of turnover. The rates are set annually in October.

Mosley and Jones appeared before the first meeting of a legislative subcommittee on federal stimulus oversight.

Jones said the recent unemployment rate of 12 percent in June compares to 6.4 percent of the same month in 2008 and 4.6 percent in 2007.

The state is paying out $38 million a week, of which $22 million comes from the state and the rest from the federal government.

A person can draw unemployment benefits up to 79 weeks. Maximum weekly benefits are $400 a week plus an extra $25 in a special federal program.

So far, 1,800 people have exhausted their benefits. The National Employment Law Project, a private research group, estimates more than 16,000 Nevadans will reach 79 weeks of benefits by the end of the year and lose their benefits unless it’s extended.

Jones said there is a bill in Congress to extend the benefits for 13 weeks in high unemployment states. of which Nevada is a part of.

Eighteen states have already borrowed from the federal government and the government trust fund is out of money. So the federal trust fund is having to borrow from the general fund, Jones said.

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