Monday, January 25, 2010

Tennessee Unemployment Fund in Danger

Posted By on Mon, Jan 25, 2010 at 2:58 PM

A friend of mine sent me this link today: estimates of where state unemployment benefit funds will be in six months.

The verdict for Tennessee's system? Insolvent.

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Here's ProPublica's graph of Tennessee data: an unemployment rate of 10.5 percent in November 2009, with 36 percent of unemployed receiving benefits.

ProPublica says:

Low taxes and benefits kept Tennessee's unemployment fund afloat before the recession — albeit with just six months' worth of reserves. We project that Tennessee's fund will be insolvent within six months. To slow the depletion, the state has imposed a business tax increase from $197 to $293 per employee, on average, for 2010.

The good news is, I suppose, that 25 states have already had to start borrowing money from the federal government or cutting benefits and Tennessee isn't among them.

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