Published Sept. 20, 2013
The S.C. Department of Employment and Workforce said Thursday it made a voluntary payment of $75 million to the federal government for the agency’s unemployment trust fund loan.
The payment marks the second voluntary payment the state has made this year. In May South Carolina repaid $144 million, bringing the total for 2013 to $219 million.
“In fact, we are paying $25 million more than we had originally projected.”
— Cheryl M. Stanton, executive director of the S.C. Department of Employment and Workforce
Including the most recent payment, the state still owes Washington about $455 million — or slightly less than half of the $1 billion it borrowed in the depths of the Great Recession to cover unemployment checks.
The $75 million payment “will save the taxpayers and businesses of this state $1 million in interest over the next two years, putting us on a path of being paid off by 2015 — a real reason to celebrate,” said Cheryl M. Stanton, executive director of the agency.
For the past three years, South Carolina has made early, voluntary payments on the trust fund loan, Stanton said.
“In fact, we are paying $25 million more than we had originally projected, reducing our final payment in 2015 and further saving the state interests cost,” she said.
Because of the state’s good track record in repaying the loan, South Carolina was the only state in 2012 that received a waiver to avoid the higher federal unemployment tax rates.
One criteria for states that owe money to the federal government to avoid increased federal unemployment taxes in 2013 is to make a loan payment by Nov. 10, the agency said.
The agency anticipates receiving official approval in early November from the U.S. Department of Labor to avoid the increased unemployment taxes. South Carolina avoided higher federal taxes in 2011 and 2012.
To date, South Carolina has repaid more than $520 million of the $977 million borrowed from the federal government.
The state is scheduled to repay the entire loan by the end of 2015.