U.S. state of Texas borrowing to pay unemployment benefits

HOUSTON, July 14 (Xinhua) -- Unemployment insurance trust of the U.S. state of Texas is expected to run out of money early next week and the state has to borrow 643 million U.S. dollars from the federal government to cover claims through Oct. 1, state authorities said Tuesday.

Some 82,000 unemployed Texans who will exhaust their benefits, starting this week, would not receive immediate 13-week extensions as expected, Texas Workforce Commission spokeswoman Ann Hatchitt was quoted by newspaper Dallas Morning News as saying.

Randy Townsend, the commission's chief financial officer, said at the commission's monthly meeting that about 285,000 Texans stayed on unemployment compensation in the six weeks that ended June 27, or nearly triple the number from the same six week period last year.

Lasha Lenzy, the commission's official in charge of unemployment insurance, said in the week that ended July 4, the latest for which data are available, Texas paid out 93 million U.S. dollars in benefits. The trust fund had only 119 million U.S. dollars as of last Friday.

Earlier this year, the commission already warned that the state's unemployment insurance fund would dip below mandated levels by October. Hatchitt said the state had requested a 160-million-U.S.-dollar interest-free loan from the federal government for the month of July.

The state has until the end of December 2010 to repay any loan it borrows interest free from the federal government so borrowing is "an excellent option", said Hathitt. To repay the loans, the state may have to sell bonds and the insurance taxes paid into the fund by employers could also be raised, she said.