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FOR MORE INFORMATION CONTACT: Tammy Cavender (573)
751-7500
FOR IMMEDIATE RELEASE: November 30, 2006
Governor Blunt Saves Missouri Employers over $100 Million in Taxes
Jefferson City - Governor Matt Blunt today announced the US Department of Labor gave final approval to his request to avoid reducing Federal Unemployment Tax Act (FUTA) credits given to Missouri small business owners and employers. The state received conditional approval in late September. The avoidance will save employers across the state approximately $42 per employee for a total of $102.8 million in taxes.
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. A similar request by Gov. Blunt last year saved employers $50 million in 2006 taxes.
“This is great news for Missouri’s employers and economy,” said Rod Chapel, director of the Missouri Department of Labor and Industrial Relations. “While the long term solvency of the trust fund is not entirely resolved, this will help preserve the economic growth the state has experienced over the last two years.”
Missouri was required to meet certain criteria set forth by the federal government before final approval was granted. One criterion was to pay the amount of FUTA tax credits Missouri employers would have had to pay. The state paid $102.8 million to the federal government on October 31, 2006, nine days earlier than required.
The governor, with the assistance of the state’s Labor Department will continue to closely monitor the Unemployment Compensation Trust Fund to avoid future FUTA credit reductions until the federal debt is repaid.
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