Michigan’s unemployment fund is once again running dry. The fund has had to borrow from the federal government during the past two years to stay solvent, amassing a debt of $255 million.
But as bad off as it is, Michigan’s unemployment fund isn’t alone: New York, California and Ohio have also dipped deeply into reserve funds and are projected to deplete their funds this year or in 2009. Persistent high unemployment nationwide has drained the trust funds in 32 states to levels below the federally recommended reserve of one year’s recession-level payments. Many funds never recovered from the last economic downturn in 2001.