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Federal Unemployment Aid Enough to Keep WV Fund Solvent

February 14, 2011

CHARLESTON, W.VA. - New numbers from Workforce West Virginia say the state's unemployment insurance fund is in better shape than previously estimated, which means federal money available for modernizing the system would be enough to keep the fund solvent until the economy improves.

Paul Miller, analyst with the West Virginia Center on Budget and Policy, says the state's unemployment fund should just barely avoid running out of money this spring, and the $22 million available from the feds for reforming eligibility would be enough to keep the fund afloat.

"The fund is projected to be somewhere around five or six million dollars above water at the end of March or April, so that 22 million dollars would be enough to cover the potential shortfall. "

State Senate Bill 310 to reform eligibility has passed the Senate Labor Committee and is now before the Finance Committee. One provision would allow victims of domestic violence or stalking to collect unemployment if they had to quit their jobs.

Angie Rosser, communications coordinator with the West Virginia Coalition Against Domestic Violence, says that could ease a life-or-death choice for domestic violence victims.

"Living with violence or facing poverty: what we know is that economic security and employment security are directly linked to victims' safety."

Another part of the modernization bill would cover some part-time workers currently not eligible. Analyst Paul Miller says these are positions for which money is being paid into the fund, but a worker who loses such a job can't collect unemployment under the current system.

"Currently, only about one-third of all unemployed people collect unemployment insurance benefits, and part of that is due to these outdated eligibility restrictions."

The bill would also change the rules to cover people in other kinds of legitimate family emergencies, such as a sick family member or a spouse who has to move in order to keep a job.

Some business lobbyists say eligibility changes might cost the fund $10 million a year, but other estimates say that figure is exaggerated. If the unemployment fund runs out and the state has to borrow from the federal government, it could mean interest payments and sharply higher bills to businesses.

Dan Heyman, Public News Service - WV