$75M to replenish RI unemployment fund

PROVIDENCE, R.I. (WPRI) - Rhode Island will receive a $75 million interest-free line of credit from the federal government to replenish a state unemployment fund drained by double-digit joblessness and soaring relief claims, state officials said Friday.

The state Department of Labor and Training requested and received the loan Thursday, after the balance in its unemployment insurance trust fund dropped under $24 million earlier in the week, department spokeswoman Laura Hart said. The state paid out more than $38 million in benefits in February alone.

Unemployment in Rhode Island stood at 10.3 percent in January, one of the worst rates in the country.

The state is the eleventh to apply for an interest-free line of credit from the federal unemployment insurance trust fund. As part of a federal stimulus plan passed last month, states can forgo interest payments through next year.

The state borrowed nearly $130 million from the federal fund during an economic downturn from 1975 to 1980. The state repaid the loan in 1984.

Gov. Don Carcieri's administration had previously proposed replenishing the state fund by tapping another state account. Lawmakers never approved the plan.