RICHMOND, VA (WWBT) - Virginia is paying out unemployment benefits at a rate that far exceeds the money that's coming into the system, and that means area businesses are about to take a big hit.
It's not a very merry holiday season if you're the owner of a small business.
"The bills went out. And so a lot of people are very shocked," said Dolores Esser, Virginia Employment Commission.
Today the Virginia Commission on unemployment compensation confirmed that with half a million recently unemployed workers, the state simply doesn't have enough money to pay their benefits. That triggers an automatic tax increase on employers, who help pay for the system.
"As soon as the revenue comes in from any taxes the employers are paying, we're using those to pay benefits," Esser said.
Currently, employers pay a yearly average of $95 in unemployment tax per worker. In January, that will go up to $171 dollars and could go as high as $263 by 2012.
We last stopped by Pleasant's Hardware in September, when the numbers were purely speculation. Now - the reality is, Virginia employers will have to pay more which isn't good, when the economy is already bad.
"If we don't hire this painter or we don't buy this vehicle or don't do these other things that we might otherwise have done, then that impacts people that are in those trades," said James Hatcher, Pleasant's Hardware.
Virginia is also borrowing money to help foot the bill, but it's proving not to be enough because so many, have been unemployed, for so long.
"People are staying on unemployment insurance to the end, much more, they're not finding other employment," Esser said.
Perhaps the most telling comment came from the chairman of the commission. When confronted with the unemployment tax numbers for 2010, he said, if you think that's bad...just wait 'till next year.