Rell worried about unemployment fund

November 26, 2008 4:56:47 PM PST
Gov. M. Jodi Rell said Wednesday that if Connecticut's unemployment numbers continue to rise, the state's unemployment compensation fund may fall short of cash. "All indications are we are looking at not having enough money in our unemployment compensation benefits fund," said Rell, who raised the possibility during a state Capitol news conference with U.S. Sens. Christopher Dodd and Joe Lieberman.

The state's unemployment rate climbed in recent weeks from 6.1 percent to 6.5 percent.

Rell said she hasn't received any official reports that the fund, financed by a tax on employers, is running short right now.

The state Department of Labor said the fund's balance currently stands at nearly $510 million. The legislature's goal for the fund's balance is $630 million.

"I am just saying as unemployment numbers continue to rise, we are afraid that is going to be a problem that we are going to have to face, that our businesses will have to face, because they are the ones who are paying into the unemployment fund," she said.

Nancy Steffens, a labor department spokeswoman, said Commissioner Patricia H. Mayfield is expected later this month to increase the unemployment fund solvency tax on employers.

The state paid more than $649 million in benefits to out-of-work recipients over the past 12 months. During the same period, the state collected more than $533 million.

If more money is needed for the fund, the legislature can further increase the unemployment fund solvency tax or seek federal money to make sure the state can keep sending out the checks.

"People don't have to worry that they're not going to get paid," Steffens said.

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