The fund Colorado uses to pay unemployment benefits will run out of money next week, but the state will continue to pay benefits by borrowing from the federal government, state officials said Thursday.

The fund had only $50 million left Thursday and the state paid out $70.3 million last week, said Ryan Gedney, senior economist for the Colorado Department of Labor and Employment. The state’s Unemployment Insurance Trust Fund last ran out of money in 2010 during the Great Recession, but paid back $1 billion the state borrowed by 2012. The fund also ran out money in 1982 and borrowed $221 million to continue paying benefits that were repaid by 1985.

Colorado unemployment claims drop for third consecutive week

Cher Roybal Haavid, the department’s deputy director, said in an email she can’t forecast how much the state will borrow this time, which will “depend upon the contours of the pandemic and subsequent economic recovery. It is likely the amount borrowed will exceed that of the Great Recession.” Colorado businesses won’t immediately face higher unemployment insurance premiums to pay back the federal loan this time since Gov. Jared Polis signed legislation delaying such increases for two years.

Ten other states and the Virgin Islands also have run out of money to pay unemployment benefits and have borrowed $20 billion to continue paying benefits, mostly in California, New York and Texas. Two-thirds of the states had to borrow from the federal government during the Great Recession to continue paying benefits, Gedney said.

Colorado’s fund has been depleted by paying $1.53 billion in unemployment benefits since March 29. The state has paid an additional $3 billion in benefits funded by the federal government, including those to self-employed persons, independent contractors and “gig” workers; an extra $600 a week to persons receiving unemployment benefits (which expired last month); and an extra 13 weeks of benefits after eligibility would normally expire. The state also expects to soon begin paying for an additional 13 weeks of benefits because of its high unemployment rate (10.5% in June)

The fund will become insolvent even as first-time claims for unemployment benefits from payroll workers fell last week to the lowest level in nearly five months, the department reported. However, claims from self-employed and similar workers jumped for the second time in the past three weeks.

The department reported 6,187 claims from payroll workers during the week ending Aug. 8, down 13.3% from the previous week and the fewest since state restrictions to slow the pandemic’s spread forced many businesses to shut down in mid-March. However, the 9,048 pandemic claims filed by self-employed and similar workers were up 19.3% during the same period, pushing last week’s claims up 3.5% to 15,235. The agency has received 523,390 claims from payroll workers and 171,100 claims from self-employed and others for 694,490 claims since mid-March.

In the Colorado Springs area, first-time claims from payroll workers rose 7.9% to 1,093 in the week ending July 25, the highest weekly total in two months.

Claims from self-employed and other similar workers jumped 20% to 1,190 in the week ending Aug. 1, the highest weekly total since June 20. Claims filed by area residents since mid-March now total 72,481, or more than 20% of the labor force in February.

Nationally, the number of laid-off workers applying for unemployment aid fell below 1 million last week for the first time since the viral pandemic intensified five months ago, yet still remains at a high level, The Associated Press reported.