Unemployment-Aid Fund Shrinks as Benefits Grow
Texas' unemployment rate is hovering around 4%, so the state's fund for unemployment benefits ought to be flush with cash, right? Think again.</br></br>In the past year, the unemployment trust fund has seen a dramatic rise in the size of monthly benefit payments. Total payments in the first quarter of 1999 jumped 42% to about $312 million from $219 million in the same period last year.</br></br>At the same time, the monthly balance of the fund has decreased. As of last week, officials project the fund at the end of May will have a balance of about $847 million, 13% below the May 1998 balance.</br></br>Oddly, the trend is partly due to the state's healthy economy, which is in some ways aggravating the effect of Oil Patch and other layoffs that account for the shrinking fund balances. If current trends continue, the fund by this fall could drop so far that there will be little or no new money to transfer to the state's worker-training programs. It also could reach the level that would trigger an automatic increase in the unemployment insurance premiums paid by employers.</br></br>This outlook is, of course, subject to change; an unexpected drop in the number of people collecting jobless benefits would enable the fund to build back up. But the trend is unmistakable. In their latest projection, officials with the Texas Workforce Commission say the trust fund will have a balance of $651 million on Oct. 1, excluding money tentatively set aside for job training; as recently as March, officials projected a balance of $756 million.