LITTLE ROCK — Arkansas' unemployment trust fund is in the black and, barring another recession, the $330 million the state owes the federal government for unemployment insurance could be paid off by 2015, lawmakers heard Tuesday.
LITTLE ROCK — Arkansas’ unemployment trust fund is in the black and, barring another recession, the $330 million the state owes the federal government for unemployment insurance could be paid off by 2015, lawmakers heard Tuesday.
“That’s much better news,” Sen. Johnny Key, R-Mountain Home, said after hearing a report from Artee Williams, director of the state Department of Workforce Services.
The state owes the federal government for money it borrowed to keep unemployment benefits flowing to thousands of out-of-work Arkansans during the recession. The current balance is down from $360 million.
In an effort to address the debt, the Legislature last year approved and the governor signed into law Act 861 of 2011. The law capped the maximum unemployment benefits and cut the benefit period by a week. It also eliminated wage indexing and changed some of the eligibility requirements for workers seeking unemployment.
The jobless benefit changes were in addition to legislation approved in 2009 that increased by 20 percent the unemployment insurance rate employers pay.
Williams and Ron Calkins, assistant DWS director of unemployment insurance, told lawmakers Tuesday that those changes have enabled the state to replenish the state’s unemployment trust fund. The fund has about $52 million, they said.
The state paid $30 million on unemployment insurance debt last year and expect to make another $30 million payment on the debt later this year. Officials also expect a $21 million reduction in the debt this year because of a federal tax credit.