State's Unemployment Fund Running Low On Money
Posted January 16, 2003
RALEIGH, N.C. — North Carolina is still in the grips of a recession. Recent statistics suggest 6 percent of the work force is out of a job. On Thursday, state leaders have learned with North Carolina's once robust fund to pay out jobless benefits is about to go broke.
Michael Lewis, 42, has been searching the job listings at the Wake County unemployment office. It is a routine he has kept since losing his job from IBM last spring.
"I have been in computers since my early 20s and to, all of a sudden, not be in that field any longer, it's like a shock," he said.
The state employment security commission pays $120 million a month in unemployment claims to 250,000 receipients. Officials claim the payout exceeds the amount employers are paying in. The trust fund, which was at $500 million last year at this time, is projected to run out of money in a few weeks.
Tom Whitaker, assistant director of the state employment security commission, said the state may have to borrow $300 million to $400 million from the federal government to keep the benefits flowing. Lawmakers and Gov. Mike Easley must determine how to replenish a trust fund financed with employer taxes.
"For this year, rates have already doubled for most employers in the state. It looks like next year, it is projected to be an additional 20 percent," he said.
Jones said he remains focused on finding a job.
"In the meantime, I cannot sit back on my laurels and just wait for my check to come through," he said.
Whitaker said the fund may not run out of money if the economy picks up and more people return to work. However, economists do not see that happening anytime soon.