Nevada’s Employment Security Trust Fund in good shape
While some states are seeing their Employment Security Trust Funds bled dry by rising unemployment, Nevada’s fund is healthy enough to provide checks through 2009 and beyond.
The New York Times reported earlier this week that some 30 states are at risk of having their trust funds become insolvent in the next few months.
Two of those states, Indiana and Michigan, have trust funds that are in the red and borrowing from the federal government to pay benefits. Michigan owes the federal government more than $500 million, according to the New York Times.
According to the Times, South Carolina has asked for a line of credit from the federal government and New York State’s fund is down to just over $300 million.
“We don’t have that problem,” said Mae Worthey of the Department of employment Training and Rehabilitation.
She said there is currently about $700 million in Nevada’s Unemployment Trust Fund. She said the fund is expected finish 2009 with about $450 million despite the department projecting unemployment will average 8.6 percent through 2009.
“It’s certainly better than where some other states are,” she said. “We’re still good.”
She said Nevada’s trust fund is probably in better shape than many other states because of its policies for setting the tax on employers.
“We’re counter-cyclical,” she said, adding that the department collects money to build up the fund in good times to cover the bad times. “We collect enough money to account for the possibility of some type of catastrophe.”
Other states, she said, don’t do it that way and those are some of the states having the most trouble.
Because Nevada’s trust fund is in good shape, the division was able to avoid increasing the tax on employers this year. Division Administrator Cindy Jones said last week that $450 million is $119 million below the target they would like to have in the fund but that she didn’t want to increase the burden on employers who are struggling in this economy.
Because of the recession, the division is currently issuing about 40,000 checks a week.
The tax rate of 1.33 percent is applied to the first $25,400 each individual worker earns during the year. There are about 60,000 employers in the state who pay the tax.
Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.