Friday, Sept. 17, 2010 | 8:17 a.m.
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.