The Interim Joint Committee on Labor & Industry met this morning and heard a presentation from Secretary Joe Meyer on Unemployment Insurance. Our notes are below and a copy of the Unemployment Insurance Annual Report is available for download HERE.
HB 495
- Bill passed in 2012 Session allowed for method to borrow money to payback interest on Unemployment Insurance dollars borrowed from the Federal Government. Initially thought the money would come from a financing arrangement with KEMI, but instead the state borrowed $76 million from JP Morgan Chase at 1.95%. The Maturity/Pay Off of the loan is in 2018. Didn't use KEMI because JP Morgan was half the finance cost.
- $47.7 million already drawn to payback Commonwealth from the last years interest payment and the remaining $26.3 million is available to make Sept. 23 interest payment for this year.
Overall Unemployment Insurance Status Update
- $948 million borrowed from Federal Government for Unemployment Insurance benefits as of 1/1/2012. The state borrowed and repaid $37 million earlier this year for cash flow reasons.
- Extra FUTA tax has reduced debt to $918 million as of current date. It is estimated that the debt should be down to $915 million by end of 2012 and below $800 million by the end of 2013.
- House Bill 5 Reforms related to process and tax changes are fully implemented except for changing the procedures on how employers are notified of new claims, however this should be fully implemented in the next 2 weeks.
- Appeals and Employer Protests - Secretary Meyer said that there is a perception that the appeals and protest process is tilted against business. However, his testimony was that the numbers don't show that. Of the roughly 83,000 employer protests in 2011, benefits were denied 66% of the time. Of the roughly 22,000 appeals, employers and claimants received similar treatment as each had a favorable decision rate of 31% if they brought the appeal.
- 8.2% unemployment insurance rate for this month, same as last month. Claims have been cut in half compared to last year. Positive trend from 2009-2012 in terms on initial claims and benefits paid out.
A copy of the Annual Unemployment Insurance Report is available for download HERE.
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