ATLANTA — New numbers out showed that Georgia’s unemployment rate grew to 10.2 percent in December. The state is out of money to pay out unemployment claims and is accruing debt to the federal government of more than $600 million.
“We are starting to see a little bit of light at the end of the tunnel,” said Dept. of Labor Commissioner Mark Butler.
Butler told Channel 2 Action News reporter Lori Geary that he hopes the state’s new unemployment rate has topped out.
In December, the rate increased again to 10.2 percent – up from 10 percent in November.
State lawmakers learned the state is out of money when it comes to paying out unemployment benefits and is borrowing money from the federal government for the first time.
The total tally so far is $600 million and is likely to top $800 million by the end of the year when the first interest payment is due.
The governor’s budget recommends the money should come from the state’s labor department. Butler said that would mean laying off more than 100 frontline workers who help the unemployed.
“This money is tied to the people who work in our offices, so we’re trying to work with the Governor’s Office to come up with a better plan,” said Butler.
“It is unfortunate we had to borrow the money in the first place, but we’re not alone,” said Gov. Nathan Deal.
Deal said he’s hopeful Congress will grant the states some relief on the interest payments, and the only way to Deal with the $600 million debt is to get Georgians back to work.
“We cannot tax our way out of it, we’ve got to grow our way out of it. That’s why it’s so important to create more job opportunities,” said Deal.
If the state doesn’t find a way to pay back the money, the federal government will more than likely raise taxes on employers. Butler said it is time to update Georgia’s unemployment tax code.
Deal said his transition team is looking into downsizing government by eliminating any duplication of services it can find.
In July, Gov. Sonny Perdue ordered state agencies to cut spending by four percent. Those cuts are saving about $25 million a month.
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