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Over the past several years, a number of states ran into economic problems during and after the Great Recession. For many local governments, the answer was to borrow money from the federal government to handle unemployment insurance claims.

In order to pay back those loans, states had to increase the tax rates for employers. However, one state – Rhode Island – has recently repaid its debt, which means that businesses there can expect a lower tax rate come the new year.

Rhode Island covers debt six months early
According to a news release from the Rhode Island Department of Labor and Training, the state had to borrow $905 million since 2009 in order to pay unemployment benefits to the many jobless residents in Rhode Island.

“Rhode Island employers could save more than $50 million in 2015”

Following a final payment six months ahead of schedule, employers in the state are expected to save more than $50 million next year alone. That covers the $36 million associated with the Federal Unemployment Tax Act. In 2016, employers will likely see savings of $45 million on FUTA alone.

“This is a big win for Rhode Islanders and our business community,” Gov. Lincoln Chafee said in the statement. “In 2011, my administration faced a huge challenge with an insolvent Unemployment Insurance system, an existing UI loan and a lack of a plan to repair the system or repay the loan. By borrowing from Treasury, we spared the business community the burden of repaying the loan. That was our only course of action acceptable to me.”

Rhode Island discloses 2015 tax rates
Several days ahead of the announcement related to the unemployment insurance debt, the Rhode Island DLT released the 2015 tax rates for employers in the state.

For next year, the taxable wage will be set at $21,200. Compared to 2014, that is good for an increase of $600. For employers in the highest unemployment insurance tax rate bracket – at 9.79 percent – the taxable wage base in 2015 will be $22,700. Only 16 percent of all businesses in the state are in this specific bracket.

Overall, it appears that Rhode Island’s many employers can expect more favorable financial conditions, especially related to unemployment insurance, over the coming year.

Juggling tax rates and difficult employees can become challenging at your company. Here at Corporate Cost Control, we understand these problems and are well-positioned to help. Our extensive background in cost control and human resources will allow you to better manage your unemployment insurance expenses.


Contact CCC to see how we can save your organization time and money.
Contact our Sales Team
(800) 207-6926

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