Gibbons undecided about accepting jobless money

By Cy Ryan (contact)

Monday, March 2, 2009 | 7 p.m.

CARSON CITY – Gov. Jim Gibbons hasn't decided whether to accept federal stimulus money to shore up the state’s unemployment fund.

Gibbons’ press secretary said accepting the money would cost Nevada more. In December, the state recorded a record high 9.1 percent unemployment rate with 128,100 out of work, but looking for employment.

Cynthia Jones, administrator of the state Division of Employment Security, said the national “stimulus package – this $7 billion – would cover the short term. But in the long term the state would have to decide whether to pay these extra benefits and pay the taxes we want to support these extra benefits.”

Nineteen states now have these “alternate base programs” that provide added benefits.

Nevada’s unemployment trust fund is expected to be empty by the end of this year and have a deficit of about $750 million by the end of 2010.

The current tax rate for an employer is 1.3 percent on a $26,000 of salary.

Josh Hicks, Gibbons' chief of staff, said “we are working through the Division of Employment Security to evaluate the impacts of the unemployment insurance aspects of the stimulus bill.

“As the governor has stated before, he is very concerned about any part of the stimulus bill, and hesitant to accept any part requiring an expansion in a state programs that is left unfunded once the stimulus money is gone,” Hicks said.

Jones said the Legislature could change the law to raise and extend the benefits if Gibbons decides against it.

The governor announced today he has created a “special stimulus working group” to go through the details of the federal law. “The stimulus dollars must be used to create jobs and kick-start the economic recovery.”

He said the law was “equally complex” and he “wants to make sure we have the technical input we need from the agencies that will primarily be overseeing stimulus funds.”

Jones said it was “very, very complicated how all these streams” of money work.

She said in a high jobless rate year, the cost to the state could roughly be from $10 million to $50 million.

Under the federal package, Nevada would qualify for $76.9 million of the $7 billion if it adopts the required extra benefits plans.

Cy Ryan may be reached at (775) 687-5032 or cy@lasvegassun.com.