State unemployment fund strapped

AUSTIN (KXAN) - Some 450,000 employers across Texas can expect to pay more taxes in the next few years to restore the state’s nearly depleted unemployment benefits fund.

Last week the state paid out $64 million in unemployment benefits. That is more than twice as much as the same week a year ago. It is projected that the fund will drop to just $48 million by Oct. 1, when by law it is required to have $860 million.

Under the recently passed federal stimulus bill, Texas could receive $555 million, but the state would have to broaden its eligibility standards to include part-time workers and those with compelling family reasons for not working. One analyst with the Center for Public Policy Priorities believes that is a move long overdue.

"These policies make a lot of sense on their own merits," said Don Baylor, Jr. "With $555 million involved they make even more sense, especially in these times."

Even accepting the government stimulus money, employers are likely to have to pay higher taxes to rebuild the benefits fund. How much depends on whether the state borrows from the federal government or issues bonds.