CARSON CITY, Nev. (AP) - The state trust fund used to pay benefits to jobless Nevadans is handling a big increase in claims even though it's $114 million below a projected September level, officials said Tuesday.
The fund balance is $754 million, down from $803 million just over a year ago. When the tax rates paid by employers to keep the fund solvent were set in late 2007, the state Employment Security Division estimated it would grow to about $868 million by next month.
However, the fund has seen a 50 percent jump in benefit payments in the first half of 2008, compared with the same period in 2007. The increase is nearly double the payments in the first half of 2006. The fund covers about 1.1 million workers.
Despite the demand on the fund, division administrator Cindy Jones said the fund balance is expected to be strong enough to handle "dire situations that lead to an unusual number of unemployment insurance payouts."
The fund will undergo a solvency test in the fall, and the state Employment Security Council will recommend whether to increase or
maintain the employers' tax rate, now at 1.33 percent of an employee's first $25,400 in yearly wages. Jones is expected to make a final decision on the rate in late November.
Paul Havas, chairman of the council which is made up of employer, employee and labor representatives, said the panel's policy has been to get employers to pay more than needed "to maintain a minimum balance in the good times, so during the lean times we would have adequate solvency."
Rates paid by employers range from 0.25 percent to 5.4 percent. New employers pay 2.95 percent for up to four years until they get an experience rating that determines whether their rates go up or down.
Forty-four percent of the state's employers pay the lowest rate. The highest taxpayers typically include construction companies and others with high worker turnover rates. Employers pay the entire tax, and nothing is deducted from employee wages.
On a national level, the Labor Department reported last week that the number of Americans filing claims for unemployment benefits has jumped to the highest level in five years as a result of tough economic times.
The national economy is being battered by a severe slump in housing which has triggered heavy layoffs in construction and related industries. Also, overall economic weakness and a surge in gasoline prices has resulted in heavy layoffs among auto manufacturers.
(Copyright 2008 by The Associated Press. All Rights Reserved.)