Better than expected outlook for unemployment fund offers break to Washington businesses in 2021
OLYMPIA – The Washington State Employment Security Department (ESD) today announced there will not be a solvency tax for employers in 2021, a savings for businesses of nearly $200 million, based on a higher than expected unemployment trust fund balance at the end of September. At this time, due to improved economic forecasting, it is also projected that the state will not need to take out federal loans to continue paying unemployment benefits in 2021, as was previously anticipated.
“This is great news for employers and businesses in Washington,” said ESD Commissioner, Suzi LeVine. “Having one of the nation’s strongest unemployment trust funds is helping us weather this crisis better than many states. Coupled with a stronger than expected state revenue forecast last week, this means an improved outlook overall and a break for employers when they most need it.”
By state law, ESD is required to impose the 0.2% solvency tax on businesses if the unemployment trust fund is projected to fall below seven months of benefits. Today’s trust fund balance is such that ESD has determined the fund can pay seven months of benefits.
The improved outlook also means Washington will not need to borrow from the federal government in 2021, contrary to previous projections released in June. The September projections show that the state may still need to request a line of credit from the U.S. Department of Labor, as is required by federal law to sustain at least three months of benefit payments. However, no borrowing from that line of credit is expected. Currently, 20 states and the Virgin Islands have requested advances from the federal government and 19 are borrowing against those lines of credit. The complete Unemployment Insurance Trust Fund Forecast report for September will be released on Thurs., October 1, and the final 2020 report will be released at the end of November.
Source: WA Employment Security Dept.