State Moves Proactively to Save Employers $1,200,000
October 28- The State of Hawaii Department of Labor and Industrial Relations Director Dwight Takamine stated “We are pleased to announce, that the Unemployment Trust Fund (UTF), which is used to pay unemployment benefits, has entered the NEW Fiscal Year in the Black”.
The State of Hawaii had borrowed funds from the Federal Government in December 2010, and anticipated owing $1 Million in interest on September 30. Instead, the State of Hawaii only paid $211,000 for interest on loans made in December 2010. “The fact that the UTF currently has a positive balance alone is encouraging news. Furthermore, the additional $1.2 Million savings is significant fo the business community and Hawaii’s economy”, said The Chamber of Commerce of Hawaii’s President, Jim Tollefson.
The State of Hawaii employer’s were potentially facing additional interest payments this year. The DLIR had projected needing to borrow again during the last quarter of 2011, which would require the immediate payment of $371,000 in interest that had accrued on federal loans taken since January 1, 2011. For loans taken during calendar year 2011, the accrued interest of $371,000 would be waived as long as the state took no further Federal Loans between October 1 and December 31 of 2011.
To avoid having to borrow from the Federal Government, Governor Abercrombie approved an agreement between the DLIR and the Department of Budget & Finance that would temporarily allow the DLIR to replenish the Unemployment Trust Fund from the State Treasury, thus avoiding having to pay the $371,000 in accrued interest. Hawaii’s employer’s will save $1,200,000; because the law providing the mechanism for the assessment for the interest payment, allows the DLIR to forego charging an Employment & Training Fund Assessment next year. DLIR project paying off any short-term loan by the end of 2011.
Governor Neil Abercrombie stated “The legislature deserves much credit for crafting a temporary mechanism in our law to pay interest that both met Federal requirements and Provided tax savings for businesses during these challenging economic times.” “The DLIR and B&F also deserve recognition by working together to exercise prudent fiscal management, especially the staff of the Unemployment Insurance Division that generated this creative solution.”For More Information, Contact: Bill Kunstman Department of Labor and Industrial Relations Email: William.G.Kuntsman@Hawai.gov Phone: 808-586-8845 Fax: 808-586-9099 This blog was adapted from the State of Hawaii Department of Labor Oct 28-“Hawaii’s Unemployment Trust Fund out of Debt”