The closer the state gets to the national unemployment rate of 6.7 percent, the greater the threat of a more immediate insolvency, said Workforce West Virginia Executive Director Ron Radcliff.
The state rate, adjusted for seasonal hiring trends, was 4.6 percent last month. Only eight states reported less unemployment.
Radcliff is heading a task force assigned by Gov. Joe Manchin to find ways to keep the trust fund solvent. Repeated warnings about the fund's future helped spur Manchin, while the deepening economic recession has added a sense of urgency.
''It's better to look at it before you start into the problem areas, than when you're in the middle of one,'' Radcliff said last week.
Since the start of the recession last December, the national economy has shed nearly 2 million jobs. Analysts predict 3 million more will be lost between now and the spring of 2010. The recession is shaping up to be the longest since the Great Depression.
Nearly 40 percent of states don't have enough in their trust funds to last 12 months, the minimum recommended reserve. West Virginia had a $250.7 million balance last month, more than either neighboring Ohio and Kentucky despite their larger workforce populations.
West Virginia also appears to be drawing from its unemployment compensation trust fund more slowly than a majority of other states, according to a recent analysis by the National Conference of State Legislatures.
The trust fund shrank by 4.1 percent between November and Dec. 11, the analysis found, while 26 states saw their balances decline at a faster rate. South Carolina led the states, paying out nearly 58 percent of its remaining balance during those 11 days. New York and Ohio followed, with the latter expecting to have to borrow federal funds next month or February to cover benefits.
One state showed trust fund growth: Michigan, but only because it had already run out of money and has taken $612.8 million in federal loans. Its fund is pressured by the nation's worst unemployment rate, of 9.6 percent.
But a red flag for West Virginia's fund is its average high cost multiple. The U.S. Labor Department measures the fund balance as a percentage of total wages. It then calculates the ratio of benefits paid to total wages during the three costliest years for the fund during at least the last two decades. The multiple reflects the first figure divided by the second.
West Virginia's multiple for the third quarter of 2008 was 0.45. Thirty-one states has a higher, or better, multiple. Those states with lower multiples include nearly all those in danger of exhausting their trust funds within the next 12 months, and the two who have done so already: Michigan and Indiana.
Radcliff disagrees with the Labor Department calculation. He said it wrongly includes high cost rate ratios from the 1980s, when West Virginia's fund became insolvent.
Double-digit unemployment - the rate soared as high as 18.2 percent in early 1983 - plus flat trust fund revenues forced the state to borrow $308 million from the federal government to provide the needed jobless benefits. The state later sold bonds to repay those loans, levying a tax on both employers and workers to cover the bonds.
Memories of that crisis continue to haunt West Virginia's program, and also helped prompt the task force review.
''If you take away that early 80s period, our solvency has remained fairly stable,'' Radcliff said.
But a 2005 legislative audit, which warned of a looming insolvency, found that the multiple should include such historical rough patches. It cites a guide to such programs relied upon by the U.S. House Committee on Ways and Means.
''States with average high cost multiples of at least 1.0 have reserves that could withstand a recession as bad as the worst one they have experienced previously,'' the audit said, quoting from the congressional 'Greenbook.' ''States with average high cost multiples below 1.0 may face greater risk of insolvency during recessions.''
- - -
Lawrence Messina covers the statehouse for The Associated Press.