SPEARFISH -- Layoffs in South Dakota increased dramatically in 2009, draining the state’s nest egg of unemployment insurance benefits, according to a business advocate.

The costs will need to be made up and the fund replenished, according to South Dakota Chamber of Commerce and Industry spokesman David Owen.

“We will be beyond broke in the trust fund,” Owen said.

The fund averages a $24 million annual expenditure for unemployment benefits. In 2009, the fund has spent about $65 million.

He told a group of civic leaders in Spearfish last week and Lead-Deadwood Economic Development board members Friday in Deadwood that surcharges of up to $150 per employee are being charged to businesses this fall. Another surcharge is planned in the first quarter of 2010.

When the fund dips below $11 million, a quarterly surcharge is triggered, which replenishes the fund until it hits $16 million, Owen said.

The $150 surcharge is based on the first $10,000 of wages paid to each employee. Part-time employees are also included in this computation, but the surcharge is likely going to be lower.

Owen predicted the charge is likely to last four quarters, and it could resurface at a lower rate in 2011. If unemployment insurance handlers accept federal stimulus funds, they will be required to adjust some of the programs that are offered under the benefits program. Owen is surveying business owners in South Dakota to determine what might be the best course of action.

Owen also painted a grim picture in terms of the state’s budget and federal legislation.

He said Gov. Mike Rounds will deliver his budget Dec. 8, and little is known about what methods Rounds plans to use to balance revenue with expenses.

In the 2009 Legislature, lawmakers used federal stimulus money to balance the budget, choosing to lessen many of the cuts planned for state-funded programs and agencies.

This year, Owen says a similar round of proposed cuts likely will be back. “The monsters are real. This is not a drill,” he said. “The things last year they didn’t pull the trigger on will have to get a second look.”

Lead-Deadwood Economic Development director Chuck Turbiville, also a state District 31 representative, agreed with Owens’ assessment.

“He was right on,” Turbiville said. “Everything we talked about in ‘09 is on the table for 2010.”