State Makes Record Third Unemployment Trust Fund Loan Payment in a Year
December 12, 2014
$75 million repayment paves the way for solvency in early 2015
COLUMBIA, SC – The SC Department of Employment and Workforce (DEW) today announced it made a third loan payment this year to the federal government for the agency’s unemployment trust fund loan.
The $75 million payment brings South Carolina’s loan balance to $195 million and saves the state potentially $1.7 million in interest.
“Making three early loan repayments in a single year is a great sign for our state and is another example of the kind of fiscally responsible government that our administration is committed to delivering,” said Governor Nikki Haley. “Ultimately, these payments are saving our businesses and taxpayers millions in interest, and are the direct result of the record breaking employment South Carolina continues to experience.”
When the 2014 unemployment tax rate was set, the federal government estimated 1,968,209 South Carolinians were employed. As of October 2014, 2,045,499 people are employed in the state, leading to additional tax collections.
In addition, South Carolina paid approximately $70.3 million less in unemployment benefits between November 2013 and October 2014 compared to the same time frame during the previous year.
“I am excited about this extra payment because it is an outcome of our state experiencing record highs in employment during the past year,” said DEW Executive Director Cheryl M. Stanton. “At the same time, we have seen a dramatic decrease in benefit payments, which shows our economy is continuing to improve.”
To date, South Carolina has repaid more than $780 million of the $977 million borrowed from the federal government. For the fourth consecutive year, S.C. businesses will only pay the minimum 0.6 percent per employee for federal unemployment taxes because the Palmetto State once again met the requirements—including making voluntary loan payments— to obtain the maximum credit.
South Carolina is the only borrowing state to receive the full 5.4 percent credit.
