California Borrowing Billions To Pay For Unemployment

SACRAMENTO (CBS) - With one in every eight workers unemployed and empty state coffers, California is borrowing billions of dollars from the federal government to pay unemployment insurance.

The Los Angeles Times reports that the state owes $8.6 billion already, and will have to come up with a $362 million payment to Washington by the end of next September.

The continued borrowing means federal unemployment insurance taxes are going to increase, upping the annual payroll costs $21 a year per worker.

KCBS Interviews Stephen Leavy

Stephen Levy, the director of the Center for the Continuing Study of the California Economy, said there is no way the problem gets solved without some contribution from employers.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)