Oct. 7--CARSON CITY -- Nevada businesses suffering from tough economic times got good news from the state Employment Security Council today. They probably won't face an increase in the unemployment tax next year.

But those looking for a quick recovery from the recession are not going to get one, council members were told. Unemployment will climb to 14.75 percent next year and force the state to pay out $828 million more in benefits than it receives in taxes.

The council voted to keep the state unemployment tax at an average rate of 1.33 percent in 2010.

State Employment Security Division administrator Cindy Jones later said that barring unforeseen circumstances, she will support the council's recommendation when she sets next year's rate, tentatively at a Dec. 7 meeting.

Gov. Jim Gibbons had wanted the unemployment tax rate lowered to 1 percent, but council members and Jones repeatedly said that Nevada must eventually pay the federal government back the more than $1 billion in loans it will need over the next 15 months to keep sending checks to unemployed workers. They said cutting the tax rate now would make it harder to pay back the federal loan.

"Pay me now, or pay me later," Jones said.

The state unemployment trust fund, which stood at $800 million in January 2008, is due to run out of money by the third week of October. The state already has borrowed $264 million from the federal government to pay benefits through the rest of this year.

Even if the tax rate had been increased to 4.33 percent, which was studied as one option, the state could not have raised enough revenue to cover the cost of benefits paid to laid-off workers next year, officials said.

Employers pay the tax on the first $27,000 of each worker's wages.

State Economist Bill Anderson predicted that Nevada's unemployment will climb to a peak of 14.75 percent in the spring of 2010 and average 14.4 percent during the entire year. He said it will average 12.8 percent in 2011.

Nevada's 13.2 percent unemployment rate is the highest since the Employment Security Division was created in 1937 and the second highest in the nation to Michigan's 15.2 percent.

Anderson also told council members that "not in our lifetimes" will a boom return to Nevada such as the one during the 2004-06 period when Nevada job growth averaged about 6 percent a year and topped the nation.

Since the beginning of the recession in December 2007, Nevada has lost 125,000 jobs, including 75,000 so far this year.