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Unemployment Fund Could Run Out for NJ in 10 Weeks

Thursday, January 22, 2009

In another sign of the deteriorating economy, New Jersey's unemployment rate jumped significantly in just a month. W-N-Y-C's Bob Hennelly has more.

REPORTER: New Jersey's unemployment rate for last month hit 7.1 percent, a full point higher the month before. The latest jobless figures are on a par with the nation, and it means New Jersey's already stressed Unemployment Insurance Fund will need a quick infusion of hundreds of millions of dollars.

Right now the fund has enough left to pay claims for the next ten weeks. Without a fast tracked infusion from the state, employers will be hit with an automatic tax hike to keep the fund solvent, something lawmakers want to avoid.

For years, budget makers diverted billions from the fund to avoid cutting spending or raising taxes. Now the need to replenish it comes as the Corzine Administration struggles to close a $2 billion budget gap for the current year due to shrinking tax revenues. For WNYC in New Jersey I am Bob Hennelly.

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