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Georgia has no plan to fully repay unemployment fund debt

Photo by Paul Murphy

Photo by Paul Murphy

Georgia's fund that sends checks to the unemployed is nearly empty, and legislation in the General Assembly won't refill it. The state may take money from Medicaid and job-creating budgets just to cover the fund's $24 million interest payment due in October.

State officials said this week that the legislation, pushed heavily by the tax-averse business community, won't return the unemployment insurance trust fund to solvency. So far, the state has borrowed $672 million from Washington to pay tens of thousands of unemployed Georgians. And the tally rises daily.

More than 191,000 Georgians -- one of every three jobless people in the state -- received unemployment insurance payments last week, according to the Labor Department. The average payment is $269 per week. Labor officials say all jobless recipients will be paid, regardless of the state's depleted trust fund.

The recession's double-digit unemployment, combined with insufficient tax contributions from employers, depleted the trust fund. Georgia's wounds, though, are self-inflicted after the state halted payments into the fund by most employers more than a decade ago.

House Bill 292 would kick a final decision to restore the fund down the road. It would also reduce the unemployment tax businesses are supposed to pay beginning next year.

The bill's supporters argue that higher taxes during an economic downturn will stifle recovery. Meantime, they'll expect a healthier economy to boost hiring, reduce business liability and whittle away the huge tab owed Washington.

"This legislation buys us a year's time to come up with a long-term plan best for Georgia," Labor Commissioner Mark Butler said.

In 1999, Georgia possessed a flush $2 billion trust fund, so Democrats and Republicans suspended payroll taxes to fund unemployment insurance for most state employers.

In 2009, the fund ran dry.