Georgia must use $70 million in federal loans to sustain the state's dwindling unemployment insurance trust fund or it will be without money by next week to pay benefits to more than 260,000 unemployed state workers, state labor officials say.
The state will use a portion of $85 million in loan funds that federal officials have already authorized and look to a "modest increase" in unemployment insurance premiums for 15 percent of Georgia's employers to pay the money back, Labor Commissioner Michael Thurmond said Thursday.
State officials had already used $4 million of the loan money by Thursday afternoon, a U.S. Treasury Web site showed.
"The claims will be paid, no matter how many there may be," Thurmond said, at a news conference. He also announced plans for a statewide Jan. 18 job summit to brainstorm on strategies to beat back Georgia's recession.
The state has averaged more than $100 million in unemployment payouts in recent months. As of Thursday, the state had $25 million left in funds earmarked to pay unemployed Georgians.
"Clearly that is not enough to maintain (and) to allow us to continue to pay benefits," said Thurmond, who also announced that November unemployment stood at 10.2 percent, up slightly from October.
Georgia has paid out $1.6 billion in unemployment insurance benefits so far this year, compared to $950 million during all of 2008.
State businesses pay taxes to replenish the state's unemployment trust fund, largely during the first quarter. Those payments haven't dwindled, but Thurmond said they haven't kept pace with the increasing payoffs _ the result both of rising unemployment and a series of extensions allowing the unemployed to draw benefits for a longer period.
"It's coming in," Thurmond said. "It's just that we're paying out _ you have so many unemployed people."
Data released Thursday showed Georgia firms shed 192,400 jobs between November 2008 and November 2009, with the highest losses in places like Dalton, Macon and Atlanta.
During the same period, the number of jobless workers receiving regular state unemployment benefits increased 11.5 percent.
The state received new 44,856 initial claims for unemployment benefits in November; records show the state had just 27,102 in December 2007, the official start of the recession.
Georgia joins 25 states and the Virgin Islands already borrowing more than $24 billion in federal loans to keep paying the unemployed, according to U.S. Department of Labor data.
The states can continuously borrow funds from the government, but face accruing interest starting in December 2010, Thurmond said.
And officials must still determine how to repay the loan.
Thurmond would not say how large a tax increase Georgia businesses could see, but said officials are looking to job creation to bail the state out of the worst economic downturn in years.
"You can't tax your way out of this," Thurmond said. "The solution is to spur economic growth."