States running out of money for jobless benefits


States are running out of money to pay unemployment claims, forcing them to borrow money from the federal government or increase taxes on businesses to pay the benefits, according to a New York Times story.

The National Association of State Workforce Agencies reports that 30 states are at risk of not having the money to pay unemployment benefits. Indiana, which has a 6.4% unemployment rate, and Michigan (9.3% unemployment) are already borrowing from the feds and other states that are in a financial crisis, such as California, may be in line soon.

Unemployment taxes are collected by states from employers, but the rate varies by state. Trust funds are supposed to be built up in good times to cover benefit requests later. The benefits are guaranteed by the federal government.

Originally published