PA, NJ borrowing millions to pay unemployment claims
Wednesday, December 23rd, 2009
By: Megan Pinto
mpinto@whyy.org
Recent U.S. Department of Labor statistics show 26 states have run out of unemployment compensation funds and have collectively borrowed more than $25 billion from the federal government.
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The national unemployment rate of 10% is draining unemployment funds in more than two dozen states.
Pennsylvania is one of the top five states with outstanding loans from the federal government. The state's Secretary of Labor, Patrick Beaty, says the department has been borrowing since March of this year and has a loan balance of nearly $1.8 billion.
Beaty: As unemployment continues to rise, our benefit payouts also increase and unless we make some structural changes to our unemployment trust funding mechanism, we are going to continue to be in debt to the federal government for many years to come.
New Jersey has borrowed more than $870 million dollars. Delaware has not yet had to dip into federal funding. The state with the highest outstanding loan from the federal government is California, which has borrowed nearly $6 billion dollars.