Welcome to

The state is almost out of money to pay unemployment benefits to thousands of jobless Floridians. 650,000 Floridians are receiving unemployment pay. As early as Monday the fund to pay claims could be at zero. As Whitney Ray tells us, once the fund is dry the state will have to borrow money to pay claims.

The state has exhausted its ability to pay unemployment claims. Early next week the federal government will have to pump millions of dollars into the state’s unemployment trust fund; money that will eventually have to be paid back. The loan will be interest free through 2010, but the debt could reach a billion dollars or higher, forcing the state to pay millions in interest alone.

It won’t just be federal dollars keeping the fund in the black. The unemployment tax on businesses will go up January 1st. Businesses will have to pay unemployment taxes on the first 8,500 dollars of each employee’s salary; before only the first 7,000 was taxable. The Florida Institute of CPA’s says the tax amount could go up even more to pay back the loan.

“We do anticipate a rate increase, but we can’t quantify it at this point. Primarily because we don’t know the length of the recession, we don’t know how many employees will be remaining in the state after the end of the recession,” said Vicki Meyer, a spokeswoman for the FICPA.

Even though the state is out of money, people receiving benefits won’t notice. Checks will still go out as scheduled. On January 1st, 2008 the state’s unemployment compensation trust fund had a balance over two Billion dollars. As of Wednesday the fund was down to just 82 Million.