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Few fixes for Florida's insolvent unemployment benefits fund
It's like sipping through a straw to put out a raging fire.
The fund that Florida uses to pay unemployment benefits officially ran dry this week. A victim of underfunding, it became overwhelmed by the prolonged recession and the pressure to meet benefit needs brought on by the state's 10.7 percent jobless rate.
A year ago, Florida's unemployment insurance trust fund sat fat and happy with $1.9 billion in its coffer. The fund dipped to $1 billion by March, $449 million by July and zilch on Monday.
"Florida's program is stingy, because it pays the unemployed so much less than the national average, and it's strict because it refuses benefits to a greater number of the unemployed than the national average," says Rick McHugh, a staff attorney with the National Employment Law Project in Ann Arbor, Mich. "And yet it still managed to become insolvent, because its leaders lack the political will to fix it."
The result? Florida is now borrowing from the federal government — a lender hardly flush with money — to keep close to half a million unemployed Floridians receiving an average of $240 a week for up to 26 weeks. The state will borrow, interest free, $300 million this month and up to $310 million in September.
Beyond that, nobody knows. But it looks unlikely any windfall will appear to revitalize the state fund in the near term.
For Jackson County, the rate is now at 15.9%, that's up from the 15.5% reported in June. In Hillsdale, the rate is now at a whopping 20%, up from 19.9%. Hillsdale is one of the hardest hit areas throughout Michigan when it comes to unemployment.
With the state unemployment rate at heights not seen since the mid 1970s, Florida's predicament is cruel but not unique. Michigan and California — with unemployment rates topping 15 and 11 percent — already have borrowed $2.4 billion and $2.6 billion from the feds. At least 18 states have run out of funding to cover unemployment benefits for their residents. Total borrowings already exceed $13 billion, and experts say 30 or more states could eventually be forced to ask for federal money.
In one fell swoop, the federal government may have turned the dreary school funding situation in Florida from disastrous to merely terrible.
The $789 billion stimulus package that President Obama signed Tuesday is slated to send more than $3 billion to Florida's K-12 public schools over two years, including hundreds of millions of dollars that may patch massive holes in district budgets next year.
Funding details for individual school districts remain sketchy.
But statewide, the federal money could shrink the size of Florida's pending education shortfall by half. And for some hard-hit districts, it might be enough to save jobs and critical programs and prevent teacher pay cuts.
Since October 2007, the Legislature has cut $1.4 billion in core K-12 education funding, and may have to trim $300 million more before this fiscal year ends in June. Insiders peg next year's education hole at $1.5 billion to $2 billion.
The stimulus pours relief from several pots of money.
According to one analysis, Florida schools will get $622 million in special education grants, $509 million for high-poverty schools, $148 million in school-improvement grants, $75 million for Head Start, $109 million in child care and development grants, and $31 million for education technology. In higher education, Florida will get $937 million for Pell grants.
More important, Florida schools will get $2.2 billion from a fiscal stabilization fund, which Congress set up to help state and local governments balance budgets and avoid layoffs.
Originally posted by dooper
reply to post by mblahnikluver
You're not talking to someone from Kansas. I live right here in Florida as well.
[edit on 28-8-2009 by dooper]
Unemployment funds stalled
About $140 million in federal stimulus funds is available to the unemployed across the state, but politics and fear of further harming businesses are holding up the distribution of that money.
To access the funds, the state would have to extend benefits to part-time workers and allow workers to collect benefits while training for a new career.
The Democratic-controlled House approved the bills earlier this year on a largely party line vote. The issue remains stalled in the Republican-controlled Senate.
``We think that is such a needed life raft in this time of crisis,'' said Judy Putnam, spokeswoman for the Michigan League For Human Services. ``It would be foolhardy to turn it down.''