Unemployment funds diminish in R.I., Mass.

PROVIDENCE—As the crisis on Wall Street continues to have a big impact on Main Street, more states are seeing their unemployment insurance funds diminish as jobless claims skyrocket.

A recent study by a New York-based policy group says 32 states, including Rhode Island and Massachusetts, do not have the amount in their funds recommended by the federal government.

The two states are described as “less than solvent”.

“What the government would like is a one year reserve for payments,“ said Raymond Filippone, assistant director of the Department of Labor and Training. “We do not have that currently.“

Filippone said the state currently as about $137 million in its unemployment insurance trust fund, down from nearly $65 million from last year.

“At this point in time we’re in good condition through the rest of the year,“ he said. “We do have concerns going in next year probably in the March or April period.“

Filippone said there’s a possibility the state may have to borrow money from the federal government to pay jobless benefits early next year. He said if that were to happen, it wouldn’t have any impact to customers because if the state gets to a point where its bankrupt, it automatically borrows funds from the federal government.

“Customers will not see a drop in payment,“ he said.