South Carolina’s unemployment insurance tax rate will be cut in 2018.
SCDEW paid off a nearly $1 billion federal loan in 2015 which the state took after its unemployment trust fund was depleted during the recession. Gov. Henry McMaster said the state has been steadily dropping rates to its unemployment insurance fund ever since. “After the recession of 2008 we had a lot of unemployment,” he told reporters in a press conference Tuesday. “We were having to put so much money out we were running out so we had to borrow $1 billion from the federal government.”
McMaster said with that being paid off, growth in the state’s economy and a solvent insurance trust fund allowed for the rate reduction. “The rates went up and also money was put into a rainy-day fund in case if it happens again,” he said. “And, over the years, we have consistently worked towards that.”
South Carolina varies its rates depending on a business’s size and how often its former employees use the program. Businesses in the lowest ratio pay a 0.06 percent effective rate, while the top ratio pays a 5.46 percent rate. The 2018 tax rate represents an average reduction of 10.2 percent and a 36.4 percent drop over the last five years.
This is also the fifth consecutive year that businesses got their individual tax rate notices during the first week of November, six months before the first tax payment is due.