State needs $600M loan to keep paying unemployment benefits next year

Posted: Updated:

PHOENIX -- Arizona could run out of money to pay unemployment benefits unless it borrows $600 million from the federal government.

Without that loan, the fund that pays the benefits will run dry by March, according to the Department of Economic Security.

The loan would be repaid by racheting up the unemployment-insurances taxes that companies pay.

Right now, companies shell out a little more than 1.3 percent on the first $7,000 an employee makes per year. That's less than $95. Under the new estimate, that percentage could jump to nearly 2, or almost $135 per empoloyee per year.

DES said the decision to borrow money will not affect the 145,000 Arizona residents who currently collect unemployment benefits.