Las Vegas Sun

October 22, 2014

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Nevada to borrow up to $1 billion to cover jobless benefits

The state will borrow between $800 million and $1 billion from the federal government this year to continue paying unemployment benefits to Nevadans.

Employers will be saddled with paying off this debt at an interest rate of 4.6 percent.

Cynthia Jones, administrator of the state Division of Employment Security, says it initially predicted it would collect $313 million a year in tax from Nevada employers in the tax they pay. But the state won't reach that figure because of high unemployment.

Jones appeared before the Legislative Commission Thursday to speak on the regulation that would keep the tax rate at 1.33 percent for Nevada employers this year.

Nevada's unemployment rate reached 13 percent in December, the second highest in the nation. The maximum payout to a jobless person is $400 a week for 99 weeks.

The state has already borrowed $201 million from the federal government. More than 40 states have dipped into the federal fund to help them pay unemployment compensation, Jones said.

Jones said she's hoping for some "federal relief" either in forgiving all or part of the debt or lowering the 4.6 percent interest rate. The state has two years to pay off the loan.

If Nevada can't pay it off by the deadline, the federal government will increase the rate it charges Nevada employers.

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