Published Aug. 30, 2011
South Carolina has made the first payment on a $963 million loan from the federal government to cover unemployment benefits, Gov. Nikki Haley said Monday.
Business owners should see premiums drop in 2015 when the loan is paid off, said John Finan, who’ll be leaving his post as director of the state Department of Employment and Workforce on Wednesday.
He’ll be succeeded on Thursday by Abraham Turner, a retired Army major general and former commander of Fort Jackson. Haley appointed Turner in May.
Paying off the federal loan will put the jobless benefits trust fund back on the “road of solvency,” Finan said at a news conference outside the governor’s Statehouse office. “Eventually in 2015, when the loan is fully paid off South Carolina businesses will see a huge decrease in unemployment insurance taxes.”
Earlier this year, the state changed the way it manages the trust fund and determined premiums for unemployment insurance.
Initially, businesses were looking at jobless premiums doubling or tripling. But the Legislature appropriated $146 million in the budget to lower insurance rates by an average of 24%.
In an interview, Finan added that “in a year or two” unemployment insurance rates are projected to “drop a little bit, and maybe a little bit more. But again we’ll look at it every year depending on the unemployment rate.
“What we’re not going to do is let it bleed, and bleed, and bleed some more like we did the last 10 years.”
About 90% of businesses paid their premiums on time and the amount of money collected matched projections, Finan said.
Haley also announced that she has shaken up the state Workforce Investment Board and rebranded 56 OneStop Centers where unemployed workers file for benefits and look for jobs.
Haley said 50% of the 31-member board is now represented by businesses, which is up from 30%. She also appointed Orangeburg businessman Michael Johnson, CEO of Cox Industries, to serve as the panel’s chairman.
Increasing business representation should help the board better address the state’s employment needs, Finan said.
“You’ve got more people on the state board who are business-oriented so they have a better feel for what’s going on,” Finan said.
The OneStop Centers will now be called “SC Works” as part of a public relations campaign that’s costing $468,000, which is being paid for by the federal government. About half the money will paid for advertising, a spokeswoman said.
The state’s jobless rate hit 10.9% in July, tying it for third-highest in the nation.