Nevada official sees little or no risk in accepting federal job funds

CARSON CITY — A state employment official said today that Nevada state government faces little or no potential long-term risk if it accepts nearly $200 million in unemployment benefits provided by the federal economic stimulus law.

In response to questions from legislators, Employment Security Division administrator Cindy Jones said acceptance of the money would create a permanent expansion of the pool of workers eligible for unemployment benefits, but the Legislature still could repeal that expansion at a future date.

Jones said taking the money temporarily would shore up the state's unemployment trust fund, which is expected to be depleted by the end of the year. She said her agency might have to borrow as much as $750 million in 2010 from the federal government to continue paying benefits to unemployed workers.

Gov. Jim Gibbons on Monday spoke out against accepting $77 million of the unemployment stimulus funds. But state Department of Employment, Training and Rehabilitation Director Larry Mosley told a told Senate-Assembly budget committee that the "governor's office has not made a decision yet."

Mosley said his department remains neutral on accepting the benefits and wants to provide accurate information to the governor and legislators.

Jones said employers now pay a maximum of $353 a year per employer to provide them unemployment benefits. If an increase were implemented, then it likely would add $14 per employee per year to that cost.

What concerns Gibbons is that under the stimulus bill Nevada would be required to provide unemployment to about 4,100 workers who are not eligible for these benefits under current laws. These workers are mainly laid-off minimum wage and construction workers, according to Assembly Speaker Barbara Buckley, D-Las Vegas.

If states take this money, the stimulus law says they cannot "sunset" its provisions, or end them at a later date. But Buckley said the federal government cannot prevent states from repealing this requirement if they choose.

Daniel Burns, Gibbons' communication director, said the requirement that the state cannot "sunset" out is what bothers Gibbons.

The governor fears that if the state takes the money, then eventually unemployment taxes paid by employers must be increased.

"We are concerned it would put us on the hook for higher unemployment taxes forever," Burns added.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.