Small business owners like home builders will pay lower than expected unemployment insurance rates in 2015, the result of the State of South Carolina quickly repaying most of the nearly $1 billion it borrowed from the Federal government during the great recession.
The State of South Carolina has repayed $780 million of the $977 million it borrowed as employers cut staff, which reduced tax revenue at a time when the state’s fund balance for unemployment benefits was tapped by the large influx of unemployed workers. The state’s unemployment rate exceeded 10 percent for several quarters during the Great Recession.
As a result of the rapid loan repayments, the Federal government reduced its premium for Federal unemployment taxes to the minimum of .6 percent. Had South Carolina not repayed its loan so quickly, the federal rate would have been 5.4 percent higher at 6 percent.