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April 24, 2014

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Unemployment could leave Nevada owing $1 billion to feds

Employers could see increase in jobless tax to pay the bill

CARSON CITY – The state will be in debt to the federal government anywhere from $750 million to $1 billion this year due to record unemployment.

And it will take years to recover, says Cynthia Jones, administrator of the state Employment Security Division.

Nevada employers will be the ones responsible for the repayment unless there is forgiveness by the federal government.

Jones and Bill Anderson, chief economist for the division, discussed the debt while testifying before the Governor’s Workforce Investment Board Thursday.

Nevada is responsible for paying benefits to the jobless for the first 26 weeks of unemployment. The extended benefits up to 99 weeks are the responsibility of the federal government.

Workers are now receiving an average of $300 a week, with the average length of benefits being 19 weeks.

Nevada posted a record of 14.3 percent unemployment for July, the highest in the nation. The August figures are due out Monday.

“We’re starting to see signs of things bottoming out,” Anderson said. “The job losses are easing.”

He said the jobless rate is “close to peaking” and added it may rise only one-half of one percent.

Jones said 44,000 Nevadans have exhausted their benefits and are not getting any payment from the state. There are an estimated 144,000 drawing the weekly checks.

She said that when the recession started, Nevada had the 18th strongest unemployment fund with reserves to pay benefits for one year, but now it has to borrow from the federal government.

The state Employment Security Council will meet Oct 5 to decide the rates employers will pay next year to finance the program. There are expected to be increases in what businesses pay in an effort to help the state fund recover and to start to pay off the federal debt.

The rates now range from .25 percent to 5.4 percent based on the worker turnover rate at a business. On average, the first $27,000 an employee earns is taxed at that level.

Anderson said young people have been hit hard by unemployment. Men have suffered more than women, partly due to the downsizing in construction, while minorities also are feeling greater effects from the downturn, he said.

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  1. Anybody correct me if I'm wrong here, but isn't unemployment insurance another one of those unfunded federal mandates? The feds passed the law and collect (or at least skim) the payments from employers, but require the state to actually pay for it?

    The only good thing about this is it shows how government regulation hurts small business, since they're the ones who take the brunt of it and are the least able to defend themselves.

    "In the general course of human nature, a power over a man's subsistence amounts to a power over his will." -- Alexander Hamilton, Federalist Paper 79, 1787-88

  2. hey gpigs, before you get your voluminous undies in a bunch, explain to us about the responsibility of our OTHER U.S. SENATOR....
    what IS his name???

  3. Harry, pick up the tab will you?

  4. FRM...
    Hit the nail on the head with that one.

    Those of you BLAMING THE UNEMPLOYED for the failed policies of Republicans, Greedy Piggy Corporations & Wall St. Thieves are too darn much!

    You are moronically parroting the Crazy Cat Lady;
    "Unemployed workers are 'lazy' and 'spoiled'...

    "Doesn't SOMEONE need their toilets cleaned? Surely you are qualified and available; GET TO WORK!"

    "You OWE US NOW! Indentured Servitude for ALL PEOPLE who collected UNEMPLOYMENT during the GREAT RECESSION! You Awful LEECHES!"

    Are you people FOR REAL???

    I've haven't heard such unadulterated, blatantly ignorant claptrap since...well, whatever the last bit of nonsense the Angle Campaign put out... Very difficult to pinpoint...
    It's ALL B.S.!!!

    WAKE UP, LEMMINGS!!!

  5. No100...
    Good luck to you, wherever you landed. Things are TOUGH out there. I just wish the Haters wouldn't hate so much on those who have found themselves in a predicament not of their own making, with very few alternatives.
    I hope we prosper again and you return to the state.
    We can use all the good people we can get.

  6. @Nancyb:

    Hopefully, Senator Ensign will be the next to go. Should have left months ago. (don't let the door hit you on the way out Senator).