State officials have applied for up to $264 million in federal loans to meet Nevada's obligations for unemployment benefits through the end of the year.
In a letter from Cynthia Jones, deputy director of the Department of Employment Training and Rehabilitation, to U.S. Labor Secretary Hilda Solis, the state asks for up to $48 million in October, $120 million in November and $96 million in December. Officials added that Nevada could need more than $1 billion to get through 2010 if the economy doesn't make a dramatic turnaround.
The letter and other correspondence from Gov. Jim Gibbons urging a waiver of interest fees was first reported Tuesday on the Las Vegas Sun Web site by columnist Jon Ralston.
Mae Worthey, spokeswoman for the Department of Employment, Training and Rehabilitation, said Tuesday that Nevada had about $21 million in its unemployment insurance trust fund at the start of the week, and roughly $95 million received in federal stimulus money and for extended benefits.
Combined, the funds will pay jobless benefits for another three to four weeks, she said.
Worthey said regular unemployment insurance payments are costing Nevada about $20 million a week, and total benefit payments including federal extensions are about $35 million per week.
The state unemployment fund is supported in part by a tax paid by employers based on worker wages. The average current rate is 1.3 percent on $26,000 in wages.
The state's Employment Security Council meets Oct. 6 to consider whether the rate should be changed.
Twenty other states plus the U.S. Virgin Islands are currently receiving federal loans to cover unemployment insurance claims during the recession, according to the U.S. Department of Labor. The total borrowed so far exceeds $15 billion.
Nevada's jobless rate reached a record 12.5 percent in July, the third highest in the nation. August figures are expected to be released Friday.
The federal stimulus bill provides states with interest free loans for unemployment claims through 2010. After that, the law provides for an interest rate of 4.6 percent on any outstanding loan balances.
In a letter to Nevada's congressional delegation, Gov. Jim Gibbons says Nevada expects to borrow more than $1 billion in 2010, and he urges them to support legislation eliminating interest charges after the interest-free grace period sunsets Dec. 31, 2010.
"Like other states, we are faced with the issue of how we will pay the interest," Gibbons said. "We are searching for alternatives but additional assessments on businesses or a general fund bailout are the only options at this point.
"These options will only serve to put more Nevadans out of work and on the public assistance roster."