The Board of Economic Advisors had a special meeting with representatives of various state offices Monday to discuss the solvency of the Unemployment Trust Fund. To send unemployment payments to the state’s many jobless workers, South Carolina government has so far had to borrow almost $1 billion from the federal government. Board of Economic Advisors Chairman John Rainey hopes that a repayment plan can be prepared this fall and that state lawmakers can deal with the issue as a priority during the next legislative year. There is another issue, that of refilling the now empty state fun. Economic advisers say that another $600,000 is needed for that, bringing the total need to almost $1.6 billion. And how will all of this affect employers? Allen Larson directs the South Carolina Department of Unemployment Insurance. He says it’s a big question that will eventually play out in the legislature. He says there may a need to treat the tax structure, including those taxes paid by the business community, and there will definitely be an affect on the money paid into the unemployment system by employers. “It’s hard to say at this point. We’ll have to take a look at the revenue side and the benefits side and it will be decided by the legislature.”
The Board of Economic Advisors will meet again July 14 to discuss several repayment options.
Board Chairman John Rainey says the money to repay the loan has to come from somewhere. “So this will be to some degree and adjustment in the contribution rate by the employers of this state–an increase in the contribution or a reduction in the credit they receive, or the wage base, or some combination of all three.”
McKinley Washington chairs the Employment Security Commission. He explains why the Unemployment Trust Funds in approximately 20 states like South Carolina ran dry. “A lot of businesses and industries have left the state. And if you don’t have the jobs, there ain’t no money in the trust fund. And you have long lines of jobless people. But the good news is that the federal government has the trust fund set up, whether a state has it or not.”