Gov. Lincoln Chafee and Director of Labor and Training Charles Fogarty announce the state has repaid a $905 million loan, to keep the unemployment insurance trust fund afloat. Photo by Steve Klamkin WPRO News
WPRO News and The Associated Press
State officials say Rhode Island businesses will save about $95 million over the next two years now that the unemployment insurance trust fund has been restored to solvency.
The fund uses revenues from a tax on employers to pay benefits to the unemployed. But Rhode Island’s high unemployment rate through the recession drained it, forcing the state to borrow $905 million from the federal government to pay benefits.
Gov. Lincoln Chafee and Department of Labor and Training Director Charles Fogarty say the state has repaid the loan early and the fund has a surplus for the first time since 2009. The state has cut unemployment benefits.
“The Director said, ‘we need to fix this’, but it’s going to be painful, and it’s going to be employers paying a little bit more, employees getting a little bit less, but we did it,” Chafee said.
The labor department says businesses will save money because interest isn’t accruing on the loan and taxes are less when the fund is solvent.
“The biggest beneficiary of all this is the business community,” said Fogarty, “because they fund this system, one hundred percent.”
Listen to Steve Klamkin’s report below:
