South Dakota Unemployment Fund
Pioneer Weekly News reports that South Dakota unemployment is getting worse and the state unemployment office is losing unemployment funds. FEMP©
South Dakota’s system for paying unemployment benefits is going broke fast, and a federal rescue package likely will have strings attached requiring broader eligibility that could cost employers many millions of dollars more in the long run.
State Labor Secretary Pam Roberts warned members of the state Unemployment Insurance Advisory Council on Feb. 12 that current trends show South Dakota’s system will run out of money in the first quarter of 2010.
The fund had a balance of $21.7 million on Jan. 31 but has been paying out more than $1 million a week recently.
A surtax on employers likely will kick Oct. 1 as the fund’s balance is drained below the $10.8 million trigger set in state law. Businesses pay taxes into the unemployment based on wages, number of employees and past usage of the system.
The problem is two-fold. More people are drawing unemployment benefits as jobs dry up. And employers are paying less into the system because there are fewer people working, some are taking pay cuts and many have seen overtime eliminated.
South Dakota’s current unemployment rate is 3.9% with 17,200 people out of work.