The SC Department of Employment and Workforce (DEW) recently made a voluntary payment of $60 million to the federal government for the agency’s unemployment trust fund loan.
“Making this $60 million early repayment and saving the taxpayers and businesses of South Carolina $1.4 million in interest is great news and exactly what is possible when a state sees the kind of economic growth and success that we have,” Governor Nikki Haley said the week the payment was made. “With our unemployment rate at a six year low and more people working than ever before, it’s clear we are moving in the right direction, and today’s announcement is further proof that it’s paying off for the people of our state.”
“For the past three years, South Carolina has made early, voluntary repayments to the trust fund loan, further saving the state, and ultimately its businesses’ interest costs,” said DEW Executive Director Cheryl M. Stanton. “Making this $60 million early loan payment could not be possible without the work of the state’s business community in improving South Carolina’s economy faster than expected. In fact, South Carolina has more than 77,000 additional people working today than when the 2014 tax rates were set.”
DEW set the 2014 tax rates in September 2013 when the federal government estimated that 1,968,209 South Carolinians were working (August 2013). In March 2014, the estimates are that 2,046,000 people are working in South Carolina, leading to additional, unanticipated tax collections by DEW.
Additionally, South Carolina has paid nearly $23 million less in unemployment insurance benefits from October 1, 2013 through April 2014 in relation to the corresponding time period from the prior year.
With the recent $60 million loan repayment, the state’s outstanding loan balance falls below $400 million to $396 million. To date, South Carolina has repaid more than $580 million of the $977 million borrowed from the federal government. The state is scheduled to repay the entire loan amount by the end of 2015.
Since becoming a borrowing state, the Palmetto State has been the only state to receive a waiver to avoid higher federal unemployment taxes for businesses. In fact, South Carolina has been granted this waiver for three consecutive years.