SD Unemployment fund in the hole. In a big way.
From KELOland:
State Labor Secretary Pam Roberts says South Dakota businesses will pay $36 million in surcharges next year to replenish the trust fund that pays benefits to unemployed workers.
Roberts says the surcharge will apply to all employers, and will be on top of the regular $26 million in unemployment taxes and interest expected to be received next year.
UGH. I can’t imagine how badly that’s going to hit employers during a period of economic downturn. Unemployment surcharges will cause fees to DOUBLE.
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Comments
I wonder how this fee is going to be structured? Will it be a chg. per employee with everybody paying the same our will it be weighted with the companies who’s former employees use the fund more then a company like mine, who’s balance is always been postive, paying more? Seems to me the companies that draw on this fund should have to be the companies that fund the biggest % of this fee.
Gee, I thought the stimulus money SD was SO anxious to take was supposed to prevent this. Another failed Obama promise, surprise, surprise. When will people WAKE UP??!
I think South Dakota refused the Obama unemployment money. I wonder if this is just another failure of the Rounds administration to deal with problems until they reach crisis level. Where is Dennis on this one? I suppose this is another of the failures he will not take credit for.
Why raise the SD unemployment tax when we ship workers in from foreign nations to work at the Custer state park. Is this cheaper than providing a bus from Rapid City to take local workers to the state park?
Nice of you to only think of employers PP. Are we (employers and employees) in a work environment together, or not? My guess is that Republican and Democrat employers alike hate laying off or firing employees but your post paints employers as indifferent at best.
And, what did happen to the stimulus money? Was S.Dak. so unprepared for a downturn that the funds ran out quickly? Did the stimulus money not materialize? Is this a partisan release from the Labor Department? I want a full accounting!
Anon 5:30, this from an article in the Mitchell Republic today.
“South Dakota already has qualified for an extra $5.9 million in federal stimulus money to help boost the fund. The extra money was provided because South Dakota now uses a more recent time period when determining workers’ eligibility for unemployment benefits.
A state advisory council on unemployment insurance also recommended last week that South Dakota act to qualify for another $11.7 million in federal stimulus money for the unemployment program. The Legislature would have to change the law to expand eligibility.”
Not only did the legislature cowtow to get the stimulus money, they will probably repeat themselves to get even more. Better tell your kids that they will be paying for this; even Rounds admitted this.
See the article at the below site.
http://www.mitchellrepublic.com/event/apArticle/id/D994KSR00
The real tragedy – from an honesty and integrity perspective (and I fully realize that these concepts don’t fit well in a political discussion) is that the Futures Fund diverted employers’ contributions from the unemployment fund under the theory that – while the funds were raised from employers for unemployment benefits – there were excess funds. 4 years ago when it became obvious that the fund was going broke, I tried to get the Rounds/Daugaard administration to stop siphoning off those funds and to put the employers money back where it was supposed to go. They refused to discuss this and opposed all of my efforts to fix the problem. The price of the liberal views of the Rounds/Daugaard administration on taxing working folks (and most employers are there working along side their employees in South Dakota) is that employers will be hit with a new tax. This could have and should have been avoided. The real question is whether we make the same mistake in the 2010 election that we made in 2002??
What is the Futures Fund Lee. Would that be similar to the loss our state and many others has taken on our tobacco money? Who operates the Futures Fund?
Only a denialist or a moron couldn’t see this coming 18 months ago – wait, I just described the legislature and executive.
And the fix will be – deny claims. Deny all first time claims, then 50% of second claims.
My father manages a small manufacturing plant in SD. He’s been talking about the rapidly diminishing funds in the unemployment fund for years. It’s too bad that the Rounds adminstration didn’t proactively address the situation then vs. the current surcharge “solution”.
Les, please explain the Futures Fund. I googled it and the article I read made it sound like the Futures Fund contributions were in addition to unemployment insurance contributions. Maybe I didn’t read it right. If the exec branch is diverting money from a fund for something else just because there is excess in it for plucking, that is blatant theft. Just ilke the feds did with Social Security funds.
the Future Fund is controlled by the Gov and is discretionary money that gets pumped into some good and some buddy deals. It was created by doing a simultaneous creation of the new tax while reducing the unemployment tax in the same amount, under the argument that the unemployment tax generated too much revenue. It is employer taxed dollars, taxed just like the unemployment fund, but diverted to this separate fund. Now that the unemployment fund is broke, the diversion should be reversed (it only was created by arguing that there were excess funds). It is wrong to keep the futures fund tax and then raise the unemployment tax, because if government had a memory it would be dishonest to keep a tax for funds that were no longer “excess” to the needs of the unemployment fund.
The surcharge, if I recall, is an additional $150 on the first $10,000 of income. So in my store — we only have four FTEs — I’ll pay an additional $600 in tax to the unemployment fund. Many other companies will pay many times more. I know plenty of employers who are doing whatever they can to keep people on the payroll, primarily through shorter or interrupted shifts. Except for seasonal gigs, there’s no new hiring. The only other time the unemployment fund went negative was in 1982. That was a doozy of a recession then. This could be worse. Stay tuned.
First, It sounds like Lee is trying to run for Lt Gov, with the comments to bring the current Lt Gov in on his 11:09 comments.
Second, When where the Future Funds created and by who?( i believe it was Gov Mick?… so dont roll this on to Rounds.If it was a bad deal it would have been shut down years many admins ago)
Third,Nice shot….. of the some good deals and some buddy deals, any proof? To me that sounds like a shot at the current gov giving inside deals…just some proof please.
(PP I think if it was someone other then Lee writing the comment you would have made a comment on a shot like that)
Fourth, doesnt the future funds purpose provide funding to help create jobs?
I think it is funny that no one has mentioned the number of businesses started from the future funds, but when times are tough, then the future funds are evil.
I think PP should maybe write an transparent pro/con article on what the future funds are….so people can really decide for themselves before throwing the current administration under the buss….
just my .02
Sorry about the rant this morning but I just think some people are thown under the bus on this article.
Thank you Lee for the explanation. It was very informative. It is truly too bad this state is left to the incompetent for eight years because of two candidates who got too negative. This is worse than cap and trade for South Dakota businesses and jobs! How does Bob Gray pin this one on Stephanie? We had better get our house in order in Pierre!
There is quite a number of us who would take Lee S for Gov in a heartbeat. BTW Anon 7:08, Money used out of the future fund for anything but unemployment bennies is not what it was intended for. Also Lee signs his comments!
Well Lee, is there any chance of your reconsidering your choice to stay out of the race?
I think I speak for a lot of us that would support you if you changed your mind.
Les, then please tell us why the future funds where created?
I truly don’t know, I am assuming it was for job creation?
If money out of the Future fund was for anything other then unemployment benennies, then why was it created.
If I am correct on the reason for the future funds,How many new companies and new jobs have been created from the start of it, do we know a list of the companies??
I am not nocking Lee,he would have been a wonderful candidate for GOV just stating that if someone else would have called out a shady deal…I think some proof should follow, other wise it is hear say.
Please do tell Lee if any are known.
Also who started the Future Funds, I am not in the Know, but I do beleive it was Gov. Mick. am I correct on this?
If I am correct then why wasnt any other Gov accused of the shady deals, or asked to pull the plug on it until the economy went bad and there was a shortfall in the unemployment kitty
Couldnt the reps change a law for this? How long has this been around…and how many years of legislation has gone by with out the legislate trying to changing it or having it brought to the fore front to try and change it?
Again that is why I ask if someone or PP would do a quick history/article on it so everyone would know the history and decide for themselves it if was good or not…
that’s all i am saying.
Lt Gov, I mispoke when I said Future Fund should only be used for unemployment benefits. What I meant was the revenue charged employers should be used for Unemployment benefits and not dark revenue spending. Future funds on the other hand when generated by an open and honest source can be great in job creation. I do not believe the end justifies the means as so many try to legislate now days. There is no way anyone other than the crew in charge should be given responsibility for what has happened. Eight years is plenty to correct any of Mick’s error’s.
Les…then why didnt Gov Janklow fix it? It has been 16+ years from the time Gov Mick. put it into play.
I’m not trying to get into a pissing match and don’t want this to be one,I just want more info.
I also just dont think it is fair to roll all this to the current gov.
There where plenty of chances to make adjustments over the years.
No one has said anything good about the future fund on this blog….it make me wonder if its no good( other then Lee S. feeling of shady deals) why do we have it?
I just want to know more, i’m not for it or against it.
When it is not broken it is easy to ride the high wave. The Future Fund is not the problem. Funding it from the unemployment, with no excess shouldn’t paint the Future Fund, it paints our legislature as sound asleep and a Governor spending what money he has to spend. Unfortunately with the rules of the road Lt Gov, the captain usually goes down with the ship. No pissing match with me. Our legislature did absolutely nothing to curb spending or problems of this nature last session when our state and country was in a world of hurt.
UGH … can you imagine how badly their former employees are doing searching for work in a Bush-burned economy! Fees for employers? Um, how about getting a grip on pink slips, sour mortgages, repossessed cars, displaced families, depressed children and adults, broken neighborhoods, unpaid bills, bad credit ratings, desparate people? For PP, fewer readers because their internet service is no long affordable. This is a LOT bigger than a higher fee for employers.