States' Funds for Unemployment Benefits Dropping

by ekramer on December 15, 2008

A sharp rise in unemployment claims has states coming up short of money to pay benefits. WFPL’s Elizabeth Kramer has more.

Indiana and Michigan have run out of funds to pay unemployment benefits and 30 other states could soon be in the same situation, according to The National Association of State Workforce Agencies. 

Indiana’s unemployment trust fund went bust in November due to rising claims and a business stimulus package that included tax cuts the Indiana legislature gave employers in 2001 and 2002.

This will not affect unemployed workers, says John Ruckelshaus of the Indiana Department of Workforce Development.

“This will have no impact whatsoever with respect to those individuals that are filing and those eligible Hoosiers who are receiving unemployment insurance benefits going forward, this will have no impact at all,” Ruckelshaus says.

Indiana is now borrowing money from the federal government and state legislators are working on a solution.

“They have come up with a series of recommendations that will do a combination of raising taxes to employers and potentially addressing the benefits and eligibility pieces of the trust fund,” Ruckelshous says.

Kentucky’s unemployment trust fund has lost nearly half its worth of a year ago.

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