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Businesses in clear with unemployment insurance plan
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By The Associated Press
State labor officials gave businesses good news Wednesday: The federal government approved Missouri's unemployment insurance plan, meaning businesses won't see a big tax increase.
The state started borrowing money from the federal government in 2003 to maintain the fund from which unemployment benefits are paid.
But the state had to start paying that money back. It submitted a repayment plan to the U.S. Department of Labor during the summer. If the plan had been rejected, the U.S. government would have imposed what's essentially a $50 million tax increase on Missouri businesses to start recouping its money.
“We've been walking a tightrope for some time now, trying to balance obligations to the federal government with as minimal fiscal impact on Missouri employers as possible,” said Missouri Chamber of Commerce President Daniel Mehan.
But even with federal approval, the state isn't out of the woods. Labor Department spokeswoman Tammy Cavender said Missouri still owes the federal government about $238 million, and the federal reprieve only lasts a year.
The Legislature passed a law last year to try to address the issue, but there are some problems with it. The law also established a group to monitor the system, and that group is supposed to recommend any changes in legislation by mid-January.
Also, as part of the plan, the state's unemployment fund cannot borrow any more money from the federal government until February. Cavender said the state may need more money, but can get it some other way, such as a commercial loan.
The state started borrowing money from the federal government in 2003 to maintain the fund from which unemployment benefits are paid.
But the state had to start paying that money back. It submitted a repayment plan to the U.S. Department of Labor during the summer. If the plan had been rejected, the U.S. government would have imposed what's essentially a $50 million tax increase on Missouri businesses to start recouping its money.
“We've been walking a tightrope for some time now, trying to balance obligations to the federal government with as minimal fiscal impact on Missouri employers as possible,” said Missouri Chamber of Commerce President Daniel Mehan.
But even with federal approval, the state isn't out of the woods. Labor Department spokeswoman Tammy Cavender said Missouri still owes the federal government about $238 million, and the federal reprieve only lasts a year.
The Legislature passed a law last year to try to address the issue, but there are some problems with it. The law also established a group to monitor the system, and that group is supposed to recommend any changes in legislation by mid-January.
Also, as part of the plan, the state's unemployment fund cannot borrow any more money from the federal government until February. Cavender said the state may need more money, but can get it some other way, such as a commercial loan.
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