MacIver News Service [Madison, Wisc…] The State of Wisconsin has run out of money to pay unemployment benefits and has borrowed one point four billion dollars from the federal government to fill the gap.
Wisconsin’s loans place the state as one of the largest Unemployment Reserve debtors in the country.
As the economic climate worsened in Wisconsin the past few years, more and more people lost their jobs and the state’s Unemployment Reserve Fund became insolvent.
“We are coming out of the worst national economic times since the Great Depression,” said John Dipko, Wisconsin Department of Workforce Development Communications Director. “Unemployment insurance has been a critical lifeline for many workers who are out of work through no fault of their own.”
The Wisconsin DWD administers the state’s Unemployment Reserve Fund.
If the amounts in Wisconsin’s Unemployment Reserve account in the U.S. Treasury are not sufficient to cover anticipated unemployment payments, the state can borrow funds from the federal government.
Despite receiving $134 million in Stimulus funds, Wisconsin’s Unemployment Reserve Fund ended 2009 with a deficit of nearly one billion dollars.
DWD’s most recent forecast for the Fund, released in April, indicates that deficit is expected to double by the end of this year, leaving a closing balance of -$1,946,000,000.
“These benefits help these workers put food on the table, pay their electric bills, fuel their cars and cover other necessities while they search for work,” said Dipko.
The deficit numbers are staggering to critics of the Doyle Administration, who also chide the Governor and legislative Democrats for their poor record on job creation.
“These alarming figures should be another wake-up call for state government leaders to focus on improving Wisconsin’s business climate for permanent, high wage jobs, rather than creating temporary government make-work at taxpayer expense,” said State Senator Alberta Darling (R-River Hills), a member of the Legislature’s Joint Committee on Finance.
The federal loan could have been even more detrimental to the State; however, the federal government has waived the interest for all funds borrowed through the end of this year.
Normally, the interest rate charged on these funds either 10 percent or the average rate on specified federal securities. However, no interest is charged if a) the loan is made in the first nine months of a year b) the loan is repaid prior to October 1st of the same year and c) no additional loans are made before the end of that calendar year.
Future interest obligations, according to a memo from the Wisconsin’s Legislative Fiscal Bureau, are significant. Based on the projected deficits in the Reserve Fund, Wisconsin’s DWD has estimated the state would owe the feds $317 million dollars in interest by 2014 if it were to continue to borrow funds from the Treasury to cover the shortcomings in the state account.
According to the National Conference of State Legislatures’ analysis of statistics provided by the U.S. Department of Labor, more than 30 states have borrowed unemployment funds and Wisconsin’s total places the state in the top one third of borrowers.
ah this what i need may be
I was wondering how much the state is oweing the feds unemployment ins.
The money to be paid back will be in the form of higher taxes by your employer,which adds to the cost of doing busness,which in turn could have an effect on raises etc. Also the next gov. has to address this problem,it could lead to higher taxes for the employer, cutting of benfits, also maybe going back to the one week waiting period. Therefore questions should be posed to each person on the state level running for office how are they are going to handle it? The voters should be doing the asking and vote according.
In order to stop the job loss in this Country; we need to abolish NAFTA. The second step we need to take is, closing our borders to all imigrents and sending illegals back to their own Countries. Last but not least we the people need to replace our Federal Government and start from scratch. Media needs to stop feeding us a line of lies.
roberto Reply:
June 15th, 2010 at 10:05 AM
I concur with you on NAFTA; however it will need to be done with Canada as well as Mexico. The border closing will have to be the same too. I aree, send the illegal immigrants back. Get the 440 transports load them up, land them on US soil and have them walk back across the Mexican or Canadian border. For the rest of them, give them a one way ticket back to their mother country. We are talking about 18 million illegal aliens. At the same time raid all of the know companies which hire or hired illegal immigrants in the past 5 years; audit their books, and fine them the amount that the LAW states. Do not look the other way.
Reopen the companies with a federal overseer on hiring; hire US citizens for the jobs; from agriculture to zoos.
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Hey John… GET A CLUE MAN, were screwed. We are not coming out of ANYTHING! The economy is STILL FREE FALLING. We are still LOSING jobs!!! This is the kind of expert thinking the state of Wisconsin taxpayers are getting for their hard earned money: “We are coming out of the worst national economic times since the Great Depression,” John Dipko, Wisconsin Department of Workforce Development Communications Director. Dear John, do you really believe this crap?
What? “We are coming out of …” ? When did we start comming out of anything? How do you think this will get paid back? Oh, yeah, the TAXPAYER! How silly of me. We all have soooo much money to dish out for more and higher taxes.
The unemployment rate in Janesville is over 30%. There are no new jobs being created to make up for the 10,000 jobs rock county has lost since 2009. How can Wi borrow from the fed they are trillions insolvent and 76 trillion short for entitlements for 76 million baby boomers.
The Wisconsin Legislature needs to stop being part of the problem. They cannot regulate businesses to prosperity. Nor pick winners or losers using taxpayers money with subsidies.
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