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MISSOURI DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS
FOR MORE INFORMATION CONTACT: Tammy Cavender (573)
751-7500
FOR IMMEDIATE RELEASE: November 9, 2005
Blunt Saves Employers Over $50 Million
Jefferson City - Gov. Matt Blunt today announced that the US Department of Labor has approved his request to avoid reducing Federal Unemployment Tax Act (FUTA) credits given to Missouri small business owners and employers. The request dates back to late June, when Gov. Blunt sent an Application for Avoidance of Tax Credit Reduction to the US Secretary of Labor. The avoidance will save employers across the state more than $50 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.
“I am pleased with the US Department of Labor’s decision to avoid reducing tax credits for Missouri’s employers,” Blunt said. “While the long term solvency of the trust fund is not entirely resolved, this is great news for employers and will preserve the economic growth the state has experienced since the beginning of the year.”
Missouri was required to meet the following criteria before the federal government would approve its application.
- Repay all advances borrowed from the federal government since November 9, 2004. A payment of nearly $92 million was made on June 29, 2005.
- Pay to the federal government the amount of FUTA tax credits employers would have had to pay. A payment of $50,300,000 will be made on November 9, 2005.
- Have sufficient funds to pay unemployment benefits without federal borrowing from November 1, 2005 through February 1, 2006.
- The state must show a net increase in the solvency of the Unemployment Compensation Trust Fund that equals or exceeds the amount of FUTA tax credit reductions.
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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Information and Planning · 3315 W. Truman
Blvd.
· P.O. Box 1958 · Jefferson City, MO
65102-1958
573-751-7500 · 573-751-6552 (Fax)
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