State Gets Help From Uncle Sam To Tide It Over
The Department of Labor, Licensing and Regulation is seeking a short-term advance of about $250 million from the federal government so the state agency can continue paying unemployment benefits.
The money will be used to pay benefits beginning next month and until April when employers send in their unemployment insurance tax payments to the state.
Reserves in the Maryland Unemployment Insurance Trust Fund have dropped from $755 million at the end of 2008 to less than $100 million. Maryland pays out about $22 million a week to residents who lost their jobs for no fault of their own.
As part of the 2009 economic stimulus package, the federal government offers tax-free advances until the end of this year to states needing to replenish their trust funds.
Maryland expects to repay the federal government by the year-end deadline.
The state agency said 26 other states have availed themselves of $25 billion in federal advances.
http://wbal.com/apps/news/templates/story.aspx?articleid=44309&zoneid=3
4 comments:
Unemployment compensation comes from the Fed to begin with.
9:54 spoken like a true democrat!
now for some enlightenment!
please never let the facts interfere with what you believe!
Currently, employers pay federal unemployment taxes of 6.2 percent on the first $7,000 earned by each of their employees during a calendar year. These federal taxes are used to cover the costs of administering the UC programs in all states. In addition, the federal UC taxes pay one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provide for a fund from which states may borrow, if necessary, to pay benefits.
State UC tax rates vary from state-to-state. State UC taxes may be used only to pay benefits to unemployed workers. The state UC tax rate paid by employers is based on the state's current unemployment rate. As their unemployment rates go up, the states are required by federal law to raise the UC tax rate paid by employers.
9:54 no it doesn't. I pay unemployment insurance tax to the DLLR (Maryland Dept. of Labor, Licensing, and Regulation) and the federal govt. (futa) every month. The statement given by the State to the Baltimore Sun cannot work out. The math won't work. Think about it. They had $755,000,000. They were paying out benefits at the same time as companies are paying into the fund and the fund still depleted to a level of $100,000,000. So even when the employers were paying into the fund, the fund was paying out at a rate at which was unable to sustain itself. So now they are going to borrow $250,000,000 from the feds with the promise to pay it back when employers paid into it at the end of this quarter. As the unemployment rate increases, more money will be taken out of the fund AND less will be paid into the fund since money paid into the fund by employers is based on payroll.
How are they supposed to pay back $250,000,000 to the feds while taking in less and paying out more when the fund can sustain itself at current levels. The plan was to increase the amount paid in by employers 3 times what they were paying. In order for small businesses to shoulder the increase is to cut employees.
Can we see where this is going here? Open your eyes folks and see whats going on around you.
They can start by weeding out the frauds collecting it.....very abused system.
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