The slow economic recovery from the Great recession and solvency measures implemented in a number of states is finally resulting in the repayment of Title XII loans and avoidance of increasing Federal Unemployment Taxes in a number of states for 2014.
As of January 1, 2014 16 states and jurisdictions had outstanding loans to be repaid. The number has dropped as of September 26th to 13, with at least 3 additional states likely to repay amounts remaining before November 10th.
States repaying loans in 2014 so far include Georgia, Missouri, New Jersey, and Wisconsin.
States likely to repay outstanding loan amounts before November 10th include Arizona, Arkansas, and Rhode Island. Delaware may also be in a position to pay off its remaining $10 million in loans.
As of November 10th it is projected that no more than 10 states and jurisdictions will continue to have outstanding Title XII loan debt. North Carolina is projecting it will make repayment in 2015.
California
Connecticut
Delaware
Indiana
Kentucky
Ohio
North Carolina
New York
South Carolina
Virgin Islands
South Carolina may continue to have an outstanding debt but is likely to avoid the imposition of the FUTA tax for 2014 through state action to qualify for a FUTA offset credit reduction avoidance. South Carolina is projected to pay off the remaining balance in mid-2015.
Also outstanding is the decision by US DOL on whether to approve waivers requests from states to avoid a Benefit Cost Rate (BCR) Add On to the FUTA tax.
The overall solvency of the state UI trust funds is slowly recovering but a number of states continue to have significant outstanding debts and low trust fund balances that will be insufficient to avoid borrowing in the event of a recession.
