May 28, 2014
The state of Georgia has paid off the principle of a loan from the federal government to cover a surge in unemployment costs during the Great Recession, although it still has to make a final interest accrual remains to be paid.
The payment of approximately $62.5 million was sent from Georgia to the federal government on May 14, according to the Atlanta Business Chronicle. A payment of about $2 million in interest remains and will be sent in September. The payoff is good news for the state, as it no longer has the debt on its books. However, the early reimbursement was partially due to an increase in the state unemployment insurance (SUI) tax rate that came into effect in 2013, because the total unemployment Trust Fund balance was below $1 billion. Employers were charged 50 percent more on their SUI payments at the beginning of that year. The fund was running a deficit of approximately $650 million at the start of 2013.
An alternative to the unpredictable SUI tax
While Georgia's state government has paid off its loan from the federal government, the SUI rate increase will not be removed until its fund reaches a positive balance of $1 billion. The amount in the fund currently stands at approximately $355 million. Employers will be dealing with high SUI tax payments for the foreseeable future.
Luckily, nonprofits have an alternative method of handling their unemployment obligation. By electing to become reimbursing employers – and paying any unemployment claims on a dollar-for-dollar basis – eligible entities can opt out of the state fund and reduce payments. However, nonprofit employers still need to be able to deal with spikes in unemployment claims. This is where savings programs such as the Bonded Service Program, the only first and last dollar coverage program in the country, can help. These programs allow nonprofits to save on SUI costs while still maintaining financial stability and reducing risk.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Group at FNCUI@firstnonprofit.com or visit www.firstnonprofitgroup.com.
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.
First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.
Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.
FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!
Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.
FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.
When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.
First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!