Tuesday, Nov. 26, 2013 | 5:30 p.m.
The state has paid off its $580 million debt owed the federal government for the loan made to pay for jobless benefits during the recession.
Renee Olson, administrator of the state Division of Employment Security, said Tuesday the early payoff will save employers $24 million.
The state borrowed $846 million from the government during the height of the economic downturn and has been repaying at a 2.5 percent interest rate a year. The division, with approval of the Legislature, sold bonds at an interest rate of less than 1 percent.
Because of the savings, the Employment Security Council recommended the state reduce the average rate paid by business from 2.25 to 2.1 percent tax. Olson will make her final decision on Dec. 4.
By paying off the debt early, it will also eliminate the yearly $63 federal tax imposed on employers.
Based on a company's employee turnover, the tax runs from 0.25 percent for those with a stable workforce to a high of 5.4 percent on a wage of $26,900. The wage level will rise to $27,400 next year. The tax collections are put into a trust fund to make unemployment payments.
Olson said, "Because the cost of borrowing was reduced, employers will see their tax rates stabilize over the course of the bond repayment period." She said this will help rebuild the trust fund which pays the benefits.