The state of South Carolina for several months has been borrowing money for all of the unemployment checks it pays out. The borrowed amount was $16 million last week alone.
The Board of Economic Advisers conducted its third meeting with employment security Commission officials Tuesday, to discuss how to rebuild the state’s Unemployment Trust Fund and repay funds borrowed from the federal government’s pool of unemployment loans.
By the end of this year, the state of South Carolina will owe the federal government $750 million.
Currently the board is looking at a recommendation that would repay $1 billion in loans, beginning the first of 2011, using a reduction in the federal credit against the state unemployment tax paid by businesses. According to federal law, the state must pay the interest on the loan, which will amount to $350 million. At that rate, it will take the state until 2019 to pay off just the borrowed money. [click to continue…]
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