Free Republic

<p>SACRAMENTO (AP) - Unless some corrections are made, California's unemployment insurance fund faces years of deficits and borrowing, a state Assembly committee was told Wednesday.</p> <p>"It's an ugly scenario," said Deborah Bronow, an Employment Development Department deputy director.</p> <p>Bronow said the fund will be forced to go to the federal government for a first-time loan of more than $1 billion this year and will have to borrow increasing amounts in future years to remain solvent, with the total topping $4 billion in 2008.</p>

SACRAMENTO — The pool of money California uses to give weekly checks to the unemployed has plummeted from $6 billion in 2002 to less than half a billion dollars, forcing the state to seek a federal bailout, raise the rates employers pay into the fund and consider decreasing benefits to laid-off workers. Starting in January, California employers — from small businesses to major corporations — can expect to pay an additional $2 billion a year into the unemployment fund, but even that won't be enough, officials say. The state asked the federal government Wednesday for a $1.3-billion loan, marking the...