(Host) The state has had to borrow less money than expected to keep its unemployment system afloat.
Vermont’s Unemployment Insurance Fund became insolvent last January, and the state has been borrowing from the U.S. Treasury to make benefit payments to unemployed Vermonters.
But speaking on Vermont Edition, the head of the Unemployment Insurance Division said the situation hasn’t been as bad as predicted.
Tracy Phillips says the state will spend about $45 million in federal money by the end of the year:
(Phillips) "The model that was presented at the beginning of the year showed us borrowing almost a $110 million. And there were a couple of factors that contributed to that not necessarily being a reality. The key issue is, again, that we experienced a modest expansion in job growth which actually has been reducing our unemployment rate. So that reduction in unemployment rate has equated to less individuals drawing benefits. So ultimately a smaller amount of payout out of the trust fund."
(Host) The unemployment rate went down more than a full point from last year – down to 5.7 percent last month.
In May, the Legislature passed reforms to address the insolvency the fund is facing now. The Unemployment Trust Fund is projected to be balanced again in 2015.