According to Gov. Mike Beebe’s office and the Arkansas State Chamber of Commerce, the state of Arkansas has paid off its federal debt for funds borrowed to prop up the state’s Unemployment Insurance Trust Fund.
The fund, which provides benefits to laid-off workers, had gone in the red up to $360 million.
Gov. Beebe and chamber officials said Thursday (Oct. 2) that the debt had been paid in full.
“This debt retirement means Arkansas employers will save $119 million on their 2014 UI [unemployment insurance] taxes payable in 2015, when they will pay $87 less per employee and avoid additional increases of $32 per employee,” said Kenny Hall, vice-president of the State Chamber.
Arkansas was one of 36 states whose UI Trust Fund went broke as a result of the Great Recession. The collective debt of the 36 states and territories peaked at $48.5 billion. As of Sept. 26, 13 states and territories still had debt with a $13.4 billion collective total as of Sept. 30.
At the end of August, the Arkansas UI Trust Fund had a positive balance of $247.7 million, according to the chamber.
The Arkansas Department of Workforce Services estimates the fund will close 2014 with a positive balance of $203.9 million. DWS also projected the Trust Fund would have a balance of $305.4 million at the end of 2015 and $345.9 million at the end of 2016.
To satisfy U.S. Department of Labor recommendations, the Arkansas UI Trust Fund should maintain a balance of approximately $500 million to be considered solvent, the chamber said.