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.
NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.
We were introduced to First Nonprofit through another housing authority. In our analysis and comparison to what we were paying the State, our first year savings was $5,800 plus. We have been with them since the end of 2008 and I am glad we have been. I consider them an arm of our HR department.
Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.
Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.