State unemployment fund may go broke next spring
The fund that pays Wisconsin's unemployment benefits has only a quarter of what it had before the 2001 recession.
Despite recent efforts to prop it up, a state projection says the fund could still go in the red for a short period next March.
The Legislature and Gov. Jim Doyle agreed this spring to make employers pay much higher taxes to the jobless fund.
But jobless claims have gone up 5 percent since the spring.
Now, unemployment insurance administrator Hal Bergan says the fund could go $6.2 million in the red at the end of next March.
In April, a big infusion of tax money is expected, bringing the fund back to $255 million.
Wisconsin is not alone in this problem. Experts say the funds for jobless benefits are nowhere near those just before the last recession because they didn't get their normal boost afterward when the economy was strong.
Still, Washington requires states to provide unemployment benefits.
That means Wisconsin will either have to raise taxes, reduce benefits or borrow from the federal government to keep the jobless fund from going insolvent.
Bergan said the state would not have to pay interest on a federal loan if it's paid back on only a few months.
In the early 1980s, the state borrowed $737 million. To pay it back, businesses paid higher payroll taxes, total benefits were frozen for five years and the state shelled out $125 million in interest.