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MISSOURI DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS
FOR MORE INFORMATION CONTACT: Tammy Cavender (573)
751-7500
FOR IMMEDIATE RELEASE: February 2, 2006
Missouri Avoids Employer Tax Credit Reduction; Economy Is Stronger
Jefferson City – The Missouri Department of Labor and Industrial Relations today announced the state met criteria set forth by the US Department of Labor (USDOL) to avoid reducing Federal Unemployment Tax Act (FUTA) credits given to Missouri small business owners and employers. The USDOL approved a request from Gov. Blunt to avoid the tax reduction last November, however the state was required to have sufficient funds to pay unemployment benefits without federal borrowing from November 1, 2005 through February 1, 2006 to meet the final requirement for avoidance. The state was able to pay unemployment benefits without borrowing during the month of January for the first time since 2003.
Gov. Blunt made the request to help manage a debt of almost $288 million, which was incurred during the previous administration. The debt began in 2003 when the Missouri Division of Employment Security began borrowing money from the federal government to pay for unemployment insurance benefits. Due to the length of time the state borrowed money from the federal government without repayment, Missouri was in jeopardy of losing FUTA credits for its employers.
Missouri experienced another month of declining initial and continued unemployment insurance claims filed by unemployed workers. According to a report from the Missouri Division of Employment Security, fewer Missourians filed initial and continued unemployment insurance claims in December.
In December 2005, the number of initial unemployment claims filed was 45,307, a decrease of 5 percent from 47,448 claims filed in December 2004. For the same period, 203,769 continued claims were filed, down 17 percent from last year’s figure of 246,315.
“Missouri’s economy has shown growth over the past year,” said Katharine Barondeau, acting director for the Missouri Department of Labor and Industrial Relations. “This is the first year since 2003 that Missouri didn’t have to borrow money during the month of January to pay unemployment insurance benefits. While there are still long-term solvency issues with the Unemployment Trust Fund, the benefit program is stronger than it was a year ago.”
Over 7,800 new jobs were added in December, bringing the total number of new jobs created in 2005 to 38,300 according to a Missouri Department of Economic Development report.
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Information and Planning · 421 East Dunklin
· P.O. Box 504 · Jefferson City, MO
65102-0504
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