Business Journal: Shortfall In Jobless Benefits

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(Sacramento, CA)
Monday, November 3, 2008
At a time when unemployment is skyrocketing, the state’s unemployment benefits fund might be running out. State officials told a legislative hearing this month that the state’s unemployment benefits fund is paying out millions of dollars a day and is on pace to go broke by March. Statewide unemployment hit 7.7 percent in August and stayed at that level in September. But unemployment is a trailing economic indicator, and the numbers are expected to go higher. Gov. Schwarzenegger will ask state legislators to address the dwindling funds. Several proposals have been discussed. They include changing eligibility requirements, raising the unemployment tax rate, or issuing state bonds to replenish the fund.
The governor said until the system is fixed, the state will ensure unemployed workers will continue to get their benefits.