For the second consecutive year, the South Carolina Department of Employment and Workforce (SCDEW) plans to cut the Unemployment Insurance (UI) tax rate, saying it will save businesses more than $151 million over that period.
Earlier this year, SCDEW announced it had paid off a nearly $1 billion federal loan needed after the state’s unemployment trust fund was depleted during the recession. SCDEW spokesman Bob Bouyea told South Carolina Radio Network that the lower UI taxes are a result of the loan now being paid off. “We reduced it last year as well, because we saw that we were on track of paying off that loan,” he said.
The state had borrowed $977.7 million to stabilize its insolvent Unemployment Trust Fund after thousands of residents lost their jobs during the 2008 economic crash and recession. SCDEW has been paying that amount back over the last four years.
Bouyea said early and voluntary payments on the loan between 2011 and 2015 helped pay it off more quickly than initially planned, saving businesses more than $12 million in interest payments. “What it means is that we are saving South Carolina businesses some money that they can put back into their businesses,” he said.
South Carolina was one of 36 states to take out loans during the recession’s aftermath, but was one of the first to pay it back ahead of schedule.