State insurance fund strong despite rising jobless rate

CARSON CITY -- Unemployed Nevadans can rest easy. They will receive their jobless benefits even though more people are out of work, a state agency reported Tuesday.

Paul Havas, chairman of Nevada's Employment Security Council, said the state's Unemployment Insurance Trust Fund is solvent even though the state has paid nearly 50 percent more in benefits in the first six months of this year compared with the same period in 2007.

The comments about the fund's solvency were released because some states have had problems keeping up with the rising unemployment rate. There is no such problem in Nevada.

The Department of Employment, Training & Rehabilitation conducts a solvency test of the trust fund annually to help determine what tax rate employers need to pay in order to ensure fund levels are adequate to pay unemployment insurance benefits, Havas said.

"The responsibility of the council through the years has been to protect the trust fund for individuals who find themselves unemployed through no fault of their own," he said.

The average tax rate paid by employers is 1.33 percent. It will be re-evaluated in September. Actual rates vary based on the experience of employers.

The state unemployment tax is deposited into the trust fund, which is used to pay benefits to unemployed workers.

The trust fund balance is at $754 million.

The trust fund took in $403 million in total revenue in calendar year 2007 and paid out $332 million in benefits.

"The projected fund balance is expected to be strong enough to handle dire situations that lead to an unusual number of unemployment insurance payments," said Cynthia Jones, agency deputy director and administrator for the Employment Security Division.

People are now able to claim Emergency Unemployment Compensation benefits during the effective dates of July 6 through March 31, 2009, because of legislation passed by Congress. These claims are 100 percent federally funded however, and do not affect the state's unemployment insurance trust fund.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.

"THE RESPONSIBILITY OF THE COUNCIL THROUGH THE YEARS HAS BEEN TO PROTECT THE TRUST FUND FOR INDIVIDUALS WHO FIND THEMSELVES UNEMPLOYED THROUGH NO FAULT OF THEIR OWN."

PAUL HAVAS

CHAIRMAN, NEVADA EMPLOYMENT SECURITY COUNCIL