Gov. Tim Kaine has asked the U.S. Department of Labor for a $252 million loan to pay unemployment compensation benefits through the end of the year.
The state will need the money because of an increased demand for benefits and reduced employer contributions to the unemployment insurance trust fund.
The increase in demand has reduced the trust fund to levels that trigger a Fund Builder Tax to replenish the account. The state code requires an increase in contributions to $171 per employee because the fund has fallen below half the level deemed “sufficient” by the Virginia Code.
Kaine noted that Virginia now has the lowest unemployment tax in the region and will have the third lowest rate after the increase.
By Alan Cooper