Negative balance predicted for Colorado jobless fund
DENVER, Colorado – The latest revenue forecast from Colorado legislative economists predicts the state’s unemployment benefits fund will dip below zero in the next year before rebounding.
Having a negative balance would require the fund to borrow money from the federal government to pay benefits.
The forecast released last week was worse than one from the Colorado Legislative Council Staff in March, when it predicted the fund balance would approach insolvency with $44 million by June 30, 2010.
The fund has been pressured by mass layoffs, plummeting employment and increased benefits payments. The unemployment rate in Colorado was 7.6 percent in May, up from 4.7 percent a year earlier.
The fund is financed by state and federal assessments on employers and earns interest. Since 2004, employers also have been paying surcharges, which kick in when the fund balance gets too low.
Legislative economists said rising surcharge rates, legislation injecting federal stimulus dollars into the benefits fund and a recovering economy should bring the fund balance back above zero in fiscal 2010-2011.
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