North Dakota's unemployment insurance reserves took a hit in 2009, but the state is avoiding the problems of funds in many other states.
A report from Propublica, an investigative news organization, shows 25 states have borrowed more than $25 billion to maintain benefits to unemployed workers after trust funds ran dry. The organization predicts nine more states will be in the red within six months.
Meanwhile, 36 states face tax increases this year, ranging from a few dollars to more than $1,000 per worker, Propublica reported. A number of states also are imposing benefit cuts.
North Dakota has no plans to cut benefits, but the unemployment tax rate is higher for about 23 percent of businesses.
All employers are paying somewhat more because the unemployment tax is calculated using the state's average wage, which is up, said Darren Brostrom, director of Job Service North Dakota's unemployment insurance division. For businesses with the best records of avoiding layoffs, the maximum, annual insurance cost per worker will be $49.40, up only about $2.
Employers whose insurance more than covers the cost of claims typically pay between $49.40 and $375 per employee. Businesses with histories of multiple layoffs can pay close to $2,500 per worker.
Employers can make voluntary contributions, which doesn't eliminate the tax but can reduce the overall amount they end up paying.
Propublica lists North Dakota's average payment as $333 a year, up $89 from 2009.
However, Brostrom said the increase affects a minority of employers.
Job Service expects to collect about $69.5 million in unemployment taxes this year, a 35 percent increase from 2009.
Last year, the unemployment trust fund paid out more than $105 million, compared to the payout in a normal year of about $48 million.
"So we saw over double in payouts, but we were in good shape going into this. It was good that we were over our targets because it left us still in a good position," Brostrom said. "Because we have been over our target for the last several years, we have actually been able to lower the tax rates in three of the last four years."
Although the state has escaped the economic troubles of many states, there have been layoffs, including the closure of Sykes and e-Telecare in Minot.
Brostrom said some of the draw on the unemployment fund came because of cuts in hours that made workers eligible, rather than layoffs.
Propublica forecasts that North Dakota's unemployment reserves will drop in 2010 but will remain solvent into the future. The state entered the recession with nine months of reserves, and unemployment in the state has been relatively mild, it noted.
Job Service's projections show declining reserves in 2010 but a healthy ending balance of $83.7 million next December.
"We are solvent. We do have a target, and at this point we are over that target still," Brostrom said.
Propublica ranks North Dakota 8th nationally for net income into its fund in November, 26th in average weekly benefit and 32nd in the percentage of unemployed workers receiving benefits. About 42 percent of unemployed workers were receiving benefits in North Dakota last fall.