St. Louis Public Radio News
7:03 am
Mon February 2, 2009

Mo. unemployment benefits fund going broke

Jefferson City, MO – Missouri's unemployment benefits fund is expected to go broke next week.

The state is hoping to borrow up to $260 million from the federal government so unemployed workers will continue receiving their payments.

But Raymond Daub, chair of the Missouri State Unemployment Council, says that could cost Missouri even more money.

"We're going to pay about $160 million in interest to the federal government, plus, we will lose food and tax credits, which amounts to almost another billion dollars for the duration of this downturn," Daub said.

Daub wants lawmakers to raise state taxes on businesses, which he says would lessen the borrowing period and preserve tax credits.

State Senator Scott Rupp (R, Wentzville) doesn't like that idea.

"We just need to focus on (if) there is anything we can do, so as (we) are not raising taxes on employers, because that would maybe put x' number of employers out of business, and then we'd have a bigger unemployment problem," Rupp said.

Rupp favors looking at issuing bonds as a means of fixing the insolvency without raising taxes.