U.S. gives Virginia $62.8 million for jobless fund

The unemployment insurance trust fund that pays jobless benefits in Virginia will get $62.8 million in federal stimulus money, the U.S. Department of Labor announced yesterday.

"These funds will provide critical relief to thousands of Virginia's displaced workers as we continue efforts to get our economy back on track," Gov. Timothy M. Kaine said in a statement.

The American Recovery and Reinvestment Act money can be used to pay unemployment claims, or, at the direction of the state legislature, fund administrative or programming needs, the Labor Department said.

"There is no specific plan right now to use it for anything other than benefits," Nick Kessler, the Virginia Employment Commission's deputy commissioner, said yesterday.

The grant means the trust fund likely has enough money to pay claims through November, rather than October, before it would need to resort to federal loans.

The commission, which administers the fund, earlier projected a shortfall would hit in December or January because of the increased number of claims.

"It just really will depend on how the benefits turn out," said commission senior economist James Wilson. "They've been running high the last few months."

Through April, the state trust fund had paid out $372 million in unemployment insurance claims, or 131 percent more than during the same period last year.

At the end of last month the trust fund had $258 million, compared with $642 million at the same time last year.

While the fund is about 30 percent solvent, there is no danger benefits will not be paid. By law, the federal government must loan states money if they need it to cover jobless claims.

What does happen, however, is that taxes go up on businesses, which pay into the trust fund. This year, the average cost per employee per year is expected to be $95. Next year, the tax will be $165 per employee, Wilson said.

Nine other states have received similar stimulus funding, including New York and Minnesota, which received $137.6 million and $130 million, respectively.

Contact Emily C. Dooley at (804) 649-6016 or .