Missouri May Have to Borrow More to Pay Unemployment
Jefferson City, MO – The head of Missouri's Employment Security office says the state will likely will have to borrow another $120 million from the federal government to pay unemployment benefits this year.
The loan would be on top of $61 million already borrowed to shore up the unemployment insurance trust fund, which is insolvent.
The word came Tuesday from the head of the Division of Employment Security, Gracia Backer.
Federal law requires states to borrow money to keep jobless benefits flowing. The interest rate is almost 6.1%.
The Republican-led Missouri Legislature passed a measure authorized the state to raise cash by issuing bonds as an alternative to borrowing from the federal government. But that legislation was vetoed by Democratic Governor Holden. He said it would have increased the state's debt, and could have threatened its bond rating.
Lawmakers could consider an override during a session beginning September 10.