Posted on 10/13/2010 7:30:23 AM PDT by Oldeconomybuyer
California has borrowed $8.4 billion from the federal government to pay unemployment insurance benefits and, just like any charge account, a big interest payment will be due next year, possibly as high as $500 million.
It could be a major challenge for the state's stretched fiscal coffers because the money cannot be repaid from the unemployment insurance trust fund. Under federal law, the money will have to come from the general fund or some other source.
California's unemployment insurance trust fund plunged into the red in January 2009. California is among 32 states and the Virgin Islands that have borrowed from the federal government to pay unemployment benefits.
Collectively, as of August, they owed Uncle Sam $40.4 billion. The top 10 states, led by California, accounted for three-quarters of the total.
(Excerpt) Read more at ocregister.com ...
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