Hetty Chang reporting
Another month, another increase for our state's unemployment rate. Nevada's jobless rate is now 13.3 percent. That's only a slight increase from 13.2 percent the previous month.
These are numbers that even economists never thought they would see. 190,000 people in Nevada are now out of work. The state is paying out about $30 million a week in unemployment benefits. In that pot of money, there is $19 million left. In just a few days, Nevada will have to borrow from the federal government.
It's not an improvement but it could be a sign we're headed that way. Nevada's unemployment rate reached 13.3 percent, a small increase from 13.2 percent in August.
But if you look at the same month one year ago, our unemployment rate has nearly doubled. The only good news is that this last increase was the smallest gain in more than a year.
The same cannot be said for the Las Vegas Valley, however; the unemployment rate for our area jumped half a percentage point, almost reaching 14 percent for September.
One year ago, the unemployment rate was about half that amount in Las Vegas.
"We're definitely not used to seeing unemployment this high in Nevada. We actually haven't seen this many people out of work pretty much ever," said Mae Worthey of the Nevada Department of Employment, Training, and Rehabilitation one year ago when Nevada's jobless rate hovered around seven percent.
But every month since then, Worthey has delivered the same news.
"Now we have one of the highest unemployment rates in the country. Right now the circumstances are not that bright. Now you can be running out of your unemployment benefits."
And we've reached the point where Nevada's trust fund, which used to pay out unemployment benefits, is just about empty. So when there is a bit of good news, Worthey makes sure to point it out.
"We definitely saw a very small increase this time, which is good news. But I wouldn't say it's anything to get too excited about because we are still projected to rise in our unemployment over the next several months."
Nevada's jobless rate is expected to climb to nearly 15 percent before it tapers off. And by then, the state will be waist deep in debt to the federal government. Any day now we will have to start borrowing from the nation's bank to continue paying the unemployed.
"We will have to start using those proceeds sometime in the mid-to-late October period," confirms Chief Economist Bill Anderson.
23 states are currently borrowing money from the federal government to pay out their unemployment claims. So far, Idaho owes $71 million and California owes $4.5 billion. And in the coming months, 14 other states - including Nevada - are expected to join them.
But, just like any loan, the money comes with a fee.
"In terms of borrowing, we don't have to start paying interest until 2011," says Anderson. "But the going interest rate is 4.6 percent."
Estimates show Nevada could be borrowing $100 million per month and, so far, there is no plan in place for paying it back.
"There are different ways to pay that back," Anderson continues. "One is an assessment on employers. Another option is that we use the money from the general fund. So that will have to be a decision that will have to be made on the part of state policy makers."
We did speak with one of those state policy makers. He says one of the options the state is considering is raising the unemployment insurance tax. That's the money collected from employers to fill our state's unemployment trust fund, which is now nearly empty.
The state has decided to hold off on raising that tax until conditions improve. The first loan from the federal government will be $240 million. State officials tell us they can apply for more money every three months.
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