Unemployment Compensation Funds

Despite a steady 8.8 percent unemployment rate in Pennsylvania last month, the demand for unemployment benefits is forcing the state to borrow more money from the federal government. Between the 435,000 residents receiving unemployment compensation in Pennsylvania, between $70 and $75 million are being paid out each week. In order to keep up, state officials plan to increase the amount of money borrowed from the federal government this year to $1.85 billion.

Senate Labor and Industry Committee Chair John Gordner says there is one startling statistic shows that Pennsylvania's unemployment compensation system needs reform.

"We are second in the nation in the amount of unemployment comp benefits paid," he said. "We are only behind California, and we are certainly not the second or third or fourth-largest state."

Unemployment compensation is funded through employer taxes, but the Senate Labor and Industry Committee is exploring how to make changes that lead to solvency. Gordner says there needs to be an increase in revenues from employers, contribution from employees who benefit from the system when they have a job and something needs to change in regard to benefit issues.