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Unemployment Insurance Funds in Colorado and New Hampshire Go Bankrupt -- And Start Borrowing

Job seekers turn in registration papers while entering a career fair on Dec. 8, 2009, in Denver, Colo. Some 500 applicants turned out for the event, despite the bitter temperatures and snow. (John Moore/Getty Images)Next to global domination, our top goal with our new unemployment tracker was to create an ongoing resource to usefully pull together all the most recent data on unemployment insurance trust funds. So far, mission accomplished: our first update has taken place, and the tracker now features newly released data on trust fund balances, state unemployment insurance tax revenues and benefits paid out. (To the mathletes who loved our "Nerd Page": This is all you're getting for Valentine’s Day.)

As we've mentioned in our previous coverage, there are 53 separate state unemployment insurance systems (the states, D.C., Puerto Rico and Virgin Islands). With limited federal oversight, they have been relatively free to determine how well financed their systems would be, and how generous the benefits.

While some states had socked away ample reserves in their trust funds, others let theirs dwindle to dangerously low levels before the Great Recession even began. In our coverage last week, we highlighted the 25 states who were forced to begin borrowing money from the federal government just to keep unemployment benefits flowing.

We also predicted that nine more states would begin borrowing within the next six months, and so far our record is two for two:

  • Colorado began borrowing federal funds last week, despite an average tax increase of $73 per worker for 2010. While the state has been socked by a relatively steep rise in unemployment, it didn't help that Colorado entered the recession with relatively low reserves: the Centennial State had about eight months of reserves at the end of 2007, much less than the 18 months recommended by the Department of Labor. So far, the state has borrowed about $10 million, a number that will almost certainly increase before the state's next big tax payday in May. (See our page detailing Colorado's situation.)
  • New Hampshire officials have announced the state will begin borrowing next month, and continue to do so for about two years, despite a $138 per worker tax increase on average and a new one-week waiting period for unemployed workers who apply for benefits. (Check out our page on New Hampshire's troubles.)

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