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Unemployment Fund: Insolvent, Interest Coming Due
Thursday, August 4, 2011
Audio
Aired 8/4/11
California’s unemployment insurance trust fund is eight-and-a-half billion dollars in the red – and state officials are calling for changes to the system.
California's unemployment insurance trust fund is $8.5 billion in the red - and state officials are calling for changes to the system.
The state is able to continue to pay benefits thanks to a federal loan.
But starting in September, California will have to start paying hundreds of millions of dollars in interest on that loan.
Loree Levy is with the Employment Development Department. She said the fund is chronically imbalanced and the deficit keeps growing.
"11.1 billion by the end of 2011. We forecast a deficit of 12.7 billion by the end of 2012 if we still have no solution. So it's a situation that can no longer recover on its own, no matter how strong the economy rebounds."
The first interest payment will be about $320 million.
She also said there have been unsuccessful proposals recently to both increase the amount of money that employers put into the system and decrease benefits.
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Comments
Petdogtor | August 5, 2011 at 8:07 a.m. ― 3 years, 5 months ago
I support unemployment benefits but as an employer I have seen too many employees take advantage of the system. People who quit are given benefits when they should not. And people who are fired for good reasons can appeal and the arbitrators often give benefits without looking at all the facts in the case. In addition, I have seen multiple people get benefits even though they do not actually look for jobs. I don't know how to fix the system to prevent the abuse so that those truly laid off for economic reasons will continue to benefit but something needs to be done.
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