Kansas officials will seek federal funds next month to help pay jobless benefits because the state’s unemployment trust fund is nearly depleted.
“We are going through the worst recession in modern times,” Kansas Department of Labor Secretary Jim Garner said recently.
In addition, payroll taxes paid by employers into the fund will increase next year. Employers have enjoyed three years of falling unemployment taxes, but the average rate, which was 2.02 percent on the first $8,000 of employee wages, will go to 4.37 percent next year, according to Kansas Department of Labor projections. Actual rates charged to employers are based on a complicated formula that includes a history of benefits paid by the company.
The rate of depletion of the trust fund has been unprecedented.
In November, there were 194,271 continued claims for unemployment benefits, compared with 86,048 in November 2008. The unemployment trust fund has paid out $751 million this year, as compared with $333.1 million in 2008, $236.3 million in 2007, and $221.8 million in 2006.
In January, the state will start borrowing from the federal government to pay out jobless benefits, said Kathy Toelkes, Labor Department spokeswoman.
The state has requested $65 million in January, $97 million in February and $81 million in March, she said.
The Kansas unemployment rate for November was 6.2 percent, up from 4.7 percent in November 2008.
Kansas will join 25 other states in borrowing to pay unemployment benefits. Projections show that 35 to 40 states will eventually be using federal funds to help pay state jobless benefits.