Skubick: State unemployment fund being drained, borrowing might be next step

Michigan

Lansing, MI (WLNS) – With the state unemployment fund being drained at a record pace, a key industry leader is saying it’s only a matter of time before the state will want more money from business to keep the fund solvent.

With the construction and major businesses going back to work their major concern is the safety of the workers.

But lurking in the background is another challenge.

With the state’s jobless rate at a record 20%, the state’s unemployment fund is sending out jobless benefits to over 1.1 million recipients. And with each check, the fund grows smaller.

But the governor says the $4.6 billion fund right now is in no danger of going dry.

“We have the third-highest unemployment fund in the nation and we are concerned about the money going out because there are a lot of unknowns.”

The Michigan Manufacturers Association is the lobby group for the automakers and a host of other major industries in the state.

John Walsh, the CEO of the MMA, knows that his members provide money to the fund. Is it possible they may have to contribute more dollars?

“There has been an extraordinary drain on that fund,” says Walsh. “It’s been built up for years with good stewardship and it’s now being deployed as it should be but its possible.”

Not only is it possible, Mr. Walsh confesses the state will eventually ask for more money.

“I would expect that, yes. Yes, we think it will come eventually and we’ll have an opportunity to negotiate with the governor and legislators on that point.”

The governor said nothing about taxing industry to keep the fund solvent but she did say this…

“If necessary we will go to the federal government to borrow the money.”

Meanwhile, the jobless benefits keep on coming.

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