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Nevada's unemployment trust fund depleting quickly

Posted at 3:09 PM, Jul 13, 2020
and last updated 2020-07-14 00:54:09-04

LAS VEGAS (KTNV) — Nevada’s unemployment problems could be getting worse. While people are still struggling to get their claims paid, there’s a new issue: the money’s running out! More than 80% of the state’s trust fund is gone.

Numbers don’t paint a pretty picture of unemployment in Nevada. The state leading the nation with about a 25% unemployment rate, based on the most recent numbers in May. Thousands of Nevadans depending on unemployment benefits. Some… still struggling to get them!

"It’s just so crucial that we have these important benefits that help workers get by.”

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Amanda Novello with the Century Foundation says Nevada’s unemployment money is draining quickly. It was at $1.9 billion in January and has gone down to about $769 million dollars as of last week. Nevada may find itself possibly seeking help from the federal government.

“The federal-state unemployment insurance system has had features that say when state trust funds become exhausted, states can borrow from the federal government to continue making good on their state benefit promises.”

Matt Weidinger with the American Enterprise Institute says unemployment claims would still be paid, but the state would have to find a way to pay back, possibly by raising the payroll tax.

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“Loans are just that. They’re loans, not grants. So eventually those funds have to be repaid and the way states repay them is by raising taxes on jobs,” he said.

DETR says it expects to see a boost in the fund next month. In a statement it said:

“Additional sources of funds may stretch the fund further – in August, employer contributions for wages from April-June will be due, and DETR is working with the US Department of Labor to get federal reimbursement for the first week of benefits in each claim, a provision from the CARES Act. DETR also continues to pay federally funded benefits through the FPUC, PEUC, and PUA programs created by the CARES Act. None of the funds for any of these programs come through the state Trust Fund. Should benefit payments remain high and the Trust Fund be exhausted, Nevada would likely first turn to federal borrowing under Title XII of the Social Security Act.”

Novello says the HEROES Act passed by the House may be a way for Nevada to get federal help.

“That would provide up to 1 trillion dollars for states for flexible use for programs like UI.”

Weidinger says Nevada was in actually an okay position with the amount in its trust fund before the pandemic, but the extraordinary number of claims has led this possibility of the fund running out.