State unemployment funds are running low

WASHINGTON, Sept. 9 (UPI) -- New York, California, Ohio and Michigan are among states that may need to turn to the U.S. government to shore up unemployment benefit funds, officials said.

States are required to maintain a reserve of a year's worth of benefits at recession levels, USA Today reported Tuesday. But the trust funds in 32 states are below that level, many having never recovered from the 2001 downturn, the newspaper said.

As the unemployment rate rose to a five-year high at 6.1 percent in August, "we're going to see many more states facing insolvency than in the past," said Deputy Director of the National Employment Law Project Andrew Stettner.

The payments won't cease, said Loree Levy of the California Employment Development Department. The federal government is mandated to loan states money when the funds fall short.

"People will get their benefits. It's just a matter of where the money will come from," Levy told USA Today.