SF Chronicle: California's unemployment fund short by billions

State's unemployment fund short by billions
Tom Abate, Chronicle Staff Writer

Tuesday, June 2, 2009


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California is paying out so much for jobless benefits and collecting so little in payroll taxes that its unemployment insurance fund could be $17.8 billion in debt by the end of 2010, according to a new report from the state Employment Development Department.

This latest fiscal crisis won't immediately affect the 1.1 million Californians now collecting benefits because the state is using an interest-free federal loan to cover their checks.

But the state is supposed to repay that loan and restore its unemployment fund to solvency by 2011 - and right now, policymakers aren't sure exactly how to do that, or at what cost.

"The deficit that California looks like it is facing is staggering," said Bud Bridger, fiscal officer for the unemployment insurance program.

To rebalance the system and pay back the federal loan, lawmakers must raise payroll taxes on employers, reduce benefits for recipients, or both. .........(more)

The complete piece is at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/02/MNSG17UR5H.DTL

:banghead:

Between a bankrupt GM, a soon to be bankrupt California, gas prices on track for another $4.00/gallon summer, a massive number of ARM mortgages soon to reset??? :shrug:

n/t

:kick:

maybe it's not such a good idea to create more unemployed people, then is it?

Keeping those people employed and spending money might be a more productive thing to do.

... if we get laid off shortly after we leave, since the percentage of months you've worked in the previous 18 months in a given state determines which state has to pay benefits. Even though I'm in Oregon now, I'll be collecting funds from California.

I'm guessing my situation is more common that many would care to think out there, with many in California fleeing the state to avoid the high cost of living, whether they are working or no...

Probably makes California's situation that much worse. Plus the communications many of us from out of state will have to keep to show we're looking for work is probably also costing them a lot too.