(CONCORD) New Hampshire’s Unemployment Trust Fund is out of money. Employment Security Commissioner Tara Reardon says that the fund reached a zero balance yesterday. In an exclusive interview with New Hampshire Watchdog, Reardon says the state expects to receive a $50 million no-interest loan from the federal Department of Labor within a week, in order to pay benefits to the 35,000 Granite Staters currently receiving unemployment.
At Reardon’s suggestion last year, the New Hampshire Legislature increased both the unemployment tax rate and the base on which it is paid, effective January 1, 2010. But those quarterly payments aren’t due to the Department of Employment Security until April 30th. Reardon says the federal money will bridge the gap for approximately ten weeks until revenues can meet payments. She says 30 other states have also turned to Uncle Sam to temporarily pay unemployment benefits. Reardon projects New Hampshire’s Unemployment Trust Fund will run dry again later this year, necessitating a second round of loans. New Hampshire would have to pay interest on any loans outstanding after the first of the year.
Until this year, businesses paid unemployment taxes on the first $8,000 of an employee’s pay. That base increased to $10,000 on January 1st, and goes up an additional $2,000 for each of the next two years. Reardon says the current tax adds about $100 per year to the cost of each employee over last year’s rate.
NHES calculates that 53,000 people in New Hampshire are out of work, with 35,000 currently receiving unemployment benefits. That’s up from 7,000 in December 2008. Reardon thinks that New Hampshire’s unemployment rate has peaked at 7%, and will release February figures by March 15th. She says firms are using more overtime hours and hiring temporary workers, both precursors to hire new employees.
Read our continuing coverage at New Hampshire Watchdog.