Monday, November 23, 2009

Slo Mo Implosion

Not especially shockingly, California's UI fund is having problems.

SACRAMENTO — Already grappling with one multibillion-dollar budget deficit, cash-strapped California now is facing a crisis in its unemployment insurance fund — source of the tens of millions paid each week to jobless residents.

Amid record unemployment, the fund will likely finish the year $7.4 billion in the red, according to the latest projections from the state's Employment Development Department. Just to keep checks coming, California has had to reach into Uncle Sam's pockets for some $4.7 billion to date.

The state must return what it borrows by 2011 — or face hundreds of millions in interest payments that would come at the expense of funding for schools, parks and social services.