West Virginia officials are seeking an alternative to the costly federal loans that are keeping jobless benefits flowing in 31 other states.

Acting Gov. Earl Ray Tomblin has proposed allowing the state's unemployment compensation fund to borrow up to $20 million from emergency reserves whenever its balance runs low.

That's expected to happen by April, though not for very long. Tomblin says that borrowing money from the rainy day fund would avoid the interest rates that come with federal borrowing.

All of West Virginia's neighbors except Maryland are among the states that owe $42 billion in federal loans.

GOP lawmakers had proposed tapping the rainy day fund two years ago, when the state instead hiked taxes on employers to keep the fund solvent.

©2011 The Associated Press. All rights reserved.