 SAN FRANCISCO (KCBS) – For the second time in state history, California will have to borrow funds from the federal government to keep its unemployment benefits program financially solvent.
With the California jobless rate hitting 6.9 percent in June the state unemployment department started running out of funds. California is now expected to borrow $255 million from the federal government.
“Certainly we’ve seen unemployment that exceeded earlier projections which has amounted to higher than expected benefit payments,” says Laurie Levey of the California Employment Development Department.
Levey says that even though the California’s unemployment benefits program is stressed, it will not stop dispersing payments.
“States cannot not pay, or skip payments, to these out of work employees. That’s what this program is there to do, to help supplement their wages when they’re really down and out,” contends Levey.
There are currently close to 1.3 million Californians out of work; 300,000 more than a year ago.
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KCBS' Barbara Taylor reports
