Virginia businesses are breathing a sigh of relief at the news that the current rate of jobless benefits claims is much lower than the very high number of claims during the recent recession. This means they likely will NOT have to pay the higher amount of business taxes triggered by state law whenever the unemployment trust fund dips too low.
With nearly 380,000 initial unemployment claims in 2010, the trust fund was broke. Businesses must pay higher taxes when the fund drops below a 50% solvency level, so by 2012 they were paying an average of $236 PER employee. Virginia Employment Commissioner Ellen Marie Hess says that has changed
“We have more revenue coming in and less claim amounts coming out, so the solvency is improving faster than we had projected.”
In fact, initial claims fell to nearly 94,000 through June, and businesses are now paying a lower $186 per employee. Hess says additional funds may be coming soon.
“It’s the Treasury Offset program, which allows the agency to offset our debts against federal tax refunds. A hundred percent of the funds that are recovered would be deposited into the trust fund, thereby helping to insure its health.”
Debts are eligible for referral to the Treasury if they’re the result of fraud, failure to report earnings while collecting jobless benefits, or 90-day delinquency. An estimated 65,000 accounts will be referred.
