South Carolina has paid off early its federal unemployment loan that at one point reached nearly $1 billion and changed the way the state compensates the unemployed.
“This is a fantastic celebration,” Gov. Nikki Haley said. “We saved the businesses of South Carolina $13 million by paying this off early.”
The state wasn’t scheduled to make its final payment until November 2015. State officials credited a much lower unemployment rate, increased job training efforts, and a sharp drop in improper unemployment payments with allowing the early loan payoff.
Among the 36 states that borrowed money to pay recession-era unemployment benefits, South Carolina was the only state to avoid penalties that increase federal unemployment tax rates and would have forced businesses to pay more.
The state will now begin to build up benefit reserves. Officials expect the state’s trust fund to have $200 million in it by December 2015. It will take several more years to build reserves to a health balance.