California Jobless Payments Drop By Half

Thursday, 09 Aug 2012 02:16 PM

By Alec Weisman

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California issued $1 billion in unemployment payments in June, a 50 percent decline from the peak two years ago, according to the state Employment Development Department.

Some of the decline comes from fewer unemployed workers, according to the Orange County register, which noted that about 1.97 million are currently out of work compared to 2.26 million in June 2010.

But the drop in payments came primarily because the state failed to meet federal eligibility requirements in April extending benefit to a maximum of 99 weeks, the Register reported.

As a result, the state cut payments to a maximum of 79 weeks, forcing a cut in benefits to some 90,000.

Thousand of others are expected to lose their benefits as well each month, if Congress follows through a plan to reduce unemployment payments to a maximum of 72 weeks. According to California officials, 709,000 people now receiving benefits across the state still remain unemployed after more than a year.

The state unemployment trust fund ran out of money in January 2009 and had borrow $10 billion from the federal government to continue making benefit payments. Repayments on the loan began last year by using revenue borrowed from the California disability insurance trust fund, which will have to be repaid within four years.

To help erase the debt, employers are now paying $77 per worker in federal payroll taxes, up $21 from what they were being charged last year. The cost to employers statewide is expected to total $290 million this year and will double to $580.9 million in 2013.

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