County#039;s unemployment beating state#039;s average

Published 12:00 am Friday, February 28, 2003

Minnesota's Unemployment Insurance Trust Fund went into the red this week, causing the state to borrow from the federal government to keep paying unemployment benefits.

In 2002, the Minnesota Department of Economic Security paid $1.066 billion in unemployment benefits -- the highest ever for the state.

But Mower County's unemployment status is looking good compared to the state average. In the past three years it has stayed below the state average, although it has increased slightly, said Joe Kurtzman, manager of the Workforce Centers in Austin, Albert Lea and Fairmont.

Email newsletter signup

"Mower County is one of the bright spots in the area," he said.

At the end of 2002, the state's unemployment rate was 4.1 percent, but Mower County's was 3.3 percent. The state's year-end average unemployment rate hasn't been at 3.3 percent since the end of 2000.

The 1,405 Mower County residents who received unemployment last year used more than $4.5 million for benefits. This is lower than Freeborn County, which had 1,591 residents claim $5.3 million in benefits.

Because Mower County has a number of large business, the companies contact the Workforce Center with posting for more than one position, Kurtzman said. There are currently 35 job orders in the Mower County Workforce Center, Kurtzman said. Each job order can contain more than one request to fill positions, he said.

"Mower County is looking very good and this should be encouraging," Kurtzman said.

The Unemployment Insurance Trust Fund is financed by taxes most employers in the state pay. At its peak the fund contained $763 million, but the recent recession has depleted those funds, according to the Minnesota Workforce Center.

Because the department of economic security knew the funds would soon be gone it asked the state legislature to add a 2 percent surcharge to the current unemployment tax to pay for the interest on the federal loan. That proposal was passed last year, Kurtzman said.

Now the Unemployment Advisory Taskforce is working on a package of legislative proposals that would increase about 75 percent of employers' unemployment tax and help get the unemployment insurance trust fund out of debt faster, according to the Workforce Center.

The department of economic security has had to take out a federal loan for unemployment benefits before, most recently in the early 1990s, Kurtzman said. Other states also have had to borrow from the federal government recently to pay unemployment benefits.

"Going into loan status does not affect our ability to pay unemployment benefits," said Minnesota Department of Economic Security Commissioner Harry Mares. "The federal loan process exists for situations such as this where high payouts cause state trust funds to be used up."

Cari Quam can be reached at 434-2235 or by e-mail at :mailto:cari.quam@austindailyherald.com