SEN. UTKE: Unemployment Insurance Debt and Employee Benefit Protection – Park Rapids Enterprise
Senate Republicans recently passed a bill that immediately pays off the state’s $1.2 billion Unemployment Insurance (UI) debt to the federal government and replenishes the Unemployment Insurance (UI) Reserve Account. unemployment insurance. The total amount of this bill is $2.73 billion. This debt has been bearing interest for far too long, and it is high time we addressed it.
Two years ago, on January 1, 2020 – before the effects of COVID – the Unemployment Insurance Trust Fund balance was $1.7 billion.
Due to the emergence of COVID and subsequent governor-mandated business shutdowns, unemployment insurance claims depleted the fund’s reserve and created a negative $1.2 billion in debt.
Since then, our state has racked up over $8 million in interest debt, all still owed to the federal government. Minnesota is currently paying more than $50,000 a day in interest charges for this loan. It is simply inexcusable, this debt and the interest that is added to it every day should never have happened. Governor Walz had more than enough money from the American Rescue Plan Act (ARP) to pay off that debt last year, and he chose not to. We promised our Main Street businesses that they would not be penalized by increased unemployment insurance premiums because their employees received dollars from the Unemployment Insurance Fund due to the mandatory closures of the ‘administration. Main Street businesses should not be penalized for not causing the layoffs.
This bill to repay our debt to the federal government and replenish the Reserve Account also contains language to keep the Supplemental Assessment Account at a zero percent increase for 2022 and 2023. The Special Assessment Account is also held at a zero percent increase for 2022.
Again, our Main Street businesses should not be hit with a higher assessment rate because the administration forced them to close and their employees filed for unemployment benefits.
Paying off that debt also benefits employees across the state. If we are successful in repaying this debt and replenishing the fund, we ensure that employees continue to have this fund available for future use. This has been a critical employee benefit for the past two years, and we need to preserve and protect it. Employees should not suffer from an invoice left unpaid by our administration.
Ultimately, paying that debt helps businesses on Main Street and helps employees – it’s in everyone’s best interest that this be done.
Until our Unemployment Insurance Trust Fund reaches a level considered “adequate” by the federal government, Minnesota businesses will be penalized with higher premiums to increase funding, with these potential costs being passed on to consumers.
According to the Department of Jobs and Economic Development, it would take more than 10 years of higher additional taxes on businesses to replenish unemployment insurance trust funds. We cannot let our businesses and taxpayers bear the brunt of this cost. It is time to take care of this debt and, in turn, take care of small businesses and their employees.