State Unemployment Insurance Debt

Businesses penalized for state unemployment insurance debt, By Pamela M. Prah, November 18, 2011, Stateline.org: “Employers in 20 states will have to shell out more in taxes next year as a penalty for the states not paying back federal loans that kept unemployment programs afloat during the recession. Altogether, states still owe $37.6 billion to the feds that they borrowed when their unemployment insurance trust funds sank to zero. Most states have dealt with the problem by raising state payroll taxes on employers, making benefits to workers less generous; or a combination of the two. A handful, though, have opted to issue bonds. Idaho did it earlier this year, and Texas did it last year. And just this month, Illinois lawmakers approved legislation allowing the state to issue bonds to pay back the $2 billion the state owes the federal government for unemployment relief. Governor Pat Quinn has applauded the UI package and has indicated he will sign the measure. The state figures it will get an interest rate lower than the 4 percent it would have to pay the federal government, saving the state and businesses millions of dollars…”