When the Great Recession hit, states throughout the country all had to turn to the federal government for assistance. At the heart of the problems was unemployment insurance – there were more claims and not enough money to cover the benefits.

By borrowing from Washington, D.C., states had an out. They could pay unemployment insurance. However, they also racked up significant debt, and as a result, had to increase employers’ taxes to begin paying back that obligation.

“Arizona leaves behind a short list of states with outstanding UI debt.”

In the years since, many states have found ways to pay off their debts early, saving businesses money in the process. And, recently, one more state joined that list: Arizona.

Arizona repays UI debt
The Arizona Department of Economic Security announced in early May that its unemployment insurance debt owed to the federal government had been repaid.

The process began relatively recently, starting in June 2014. DES director Timothy Jeffries attributed some of the quick turnarounds to Gov. Doug Ducey’s budget plans.

“Consistent with Gov. Ducey’s fiscal management initiative, the Department of Economic Security is prioritizing its financial responsibilities on behalf of the citizens of Arizona,” Jeffries said in a statement. “We made good on our promise to repay federal unemployment borrowing by fulfilling our obligation.”

Arizona on the right path
With this news, Arizona leaves behind only a few more states who have yet to pay off their unemployment insurance debts from the Great Recession.

That list includes California, Connecticut, Indiana, Kentucky, Ohio, and South Carolina. Out of those, California has the largest outstanding debt at $6.2 billion.

For Arizona, this development is good news for local employers. The state’s trust fund will likely remain solvent for the remainder of 2015 – and beyond – and that means the related UI taxes could soon decline. At the very least, any increases are unlikely.

Furthermore, Arizona has more good news in the form of a declining unemployment rate. The Associated Press reported on Arizona Department of Administration data that showed the new rate at 6.2 percent for March. That is down slightly every month and is moving closer to the national rate of 5.5 percent.

Overall, these changes in Arizona could bring about more positive things to come for local employers.

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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