Early payoff means employers will see a reduction of $105 per employee
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For the first time since January 2009, Kentucky’s Unemployment Insurance (UI) Trust Fund has a positive balance and is on the path to solvency.
Gov. Steve Beshear today joined lawmakers and business leaders to announce the Commonwealth has paid off the $972 million federal loan needed to meet unemployment insurance benefit obligations during the Great Recession at least two years ahead of schedule.
Maintaining a positive balance ensures Kentucky employers will save approximately $165 million in federal UI taxes.
“Throughout my time in office, I have partnered with lawmakers and business leaders to grow Kentucky’s economy and to manage us through the worst recession of our lifetime,” Gov. Beshear said. “I appreciate and thank their continued commitment to work with us on the unemployment insurance issue these last six years so we could honor our commitments to working families. This partnership allowed us to reach this point today of early payoff of the federal loan and to ensure the solvency of our UI Trust Fund for the future.”
“I’m proud to have served on this Task Force and sponsor the legislation to make it happen.”
Rep. Larry Clark
Gov. Beshear said today’s announcement is another tangible example of the state’s ongoing economic progress. Last month, the Governor placed an $82.5 million budget surplus into the “rainy day fund,” increasing the fund balance to $209.4 million.
At the height of the recession in June 2009, Kentucky’s unemployment rate hit a high of 10.9 percent. Since that time, Kentucky has seen a steady improvement in the economy – especially the job market.
The state has experienced a decline in the unemployment rate and an increase in the number of Kentuckians at work. Kentucky’s latest unemployment rate in June 2015 dipped to 5.1 percent, the lowest it has been since June 2001. Covered employment, which includes workers covered by state UI laws, has increased by 36,700.
A positive balance in the UI Trust Fund on Nov. 10, 2015, will ensure Kentucky employers will not be subject to the additional credit reduction rate of 1.5 percent when they file their federal unemployment taxes in January 2016.
The early payoff means employers will see a reduction of $105 per employee.