State unemployment funding runs low

As California's unemployment rate hits a 12-year high, the state program that pays benefits to the jobless is facing a severe money shortage and a huge backlog of unresolved appeals. AP in the Daily News.

The unemployment insurance fund, which paid out almost $662 million in July as California's jobless rate reached 7.3 percent, is expected to have a deficit of $1.6 billion at the end of 2009.

That shortage will force the fund to borrow from the federal government for only the second time since the program was established in the 1930s.