MacIver News Service | September 19, 2014[Madison, Wisc…] The Department of Workforce Development (DWD) announced this week that all interest owed to the federal government for its loan to Wisconsin’s Unemployment Insurance (UI) Trust Fund will be paid in full by June of next year.
The recession helped to put Wisconsin’s UI Trust Fund in a $1.4 billion hole as joblessness soared, forcing the state to take a $1.6 billion loan from Washington, D.C. to cover unemployment payments. The loan represented a $60,000 per day interest payment for Wisconsin.
Now that the UI Trust Fund will be back in the black, DWD Secretary Reggie Newson indicated in the agency’s budget request that $14 million in General Purpose Revenue can be returned to the state’s General Fund in the 2015-17 biennium.
Newson praised the news of the loan being paid off and the Wisconsin’s pro-growth fiscal management.
“A financially stable and growing UI trust fund helps to support the pro-business climate that Wisconsin’s job creators need to expand and create more opportunities for working families,” Newson said in a statement. “The UI reforms that Governor Walker and the Legislature passed through the 2013-15 biennial budget and 2013 Wisconsin Act 36 are producing results, and there is more work to be done.”
DWD also reported that the UI Trust Fund’s return to balance means that the average business of 40 employees will save over $2,500 in payroll taxes in 2014.
To help raise the funds necessary to pay off the federal loan, the unemployment payroll tax was raised to 1.5 percent from its base level of 0.6 percent of the first $7,000 earned for each employee. With the loan paid off, business will see a 60 percent reduction back to the original level of 0.6 percent.