Gov. Jim Justice announced today that the administration has paid off the last $ 185 million in an interest-free federal loan that was used as a mat for the state unemployment fund.
Administration postponed hundreds of millions of dollars in CARES funding pending loan disbursements.
In the announcement, the governor said a total $ 220 million deposit to the Unemployment Trust Fund would provide enough flexibility to give employers the option to drop their unemployment insurance costs next year.
“This will be a significant cost reduction for our West Virginia business, and I am very proud of everyone who has put in every effort to make this possible,” Justice said in a press release.
Back last year Justice planned to highlight Hundreds of millions of dollars in West Virginia’s $ 1.25 billion commitment under the CARES Act to fund the Unemployment Trust Fund. He said the strategy would give employers a breathing space in the long run.
Delegate Kayla Young, D-Kanawha, who has a particular interest in unemployment issues, praised fiscal responsibility, disagreeing with an earlier decision to end extended unemployment benefits before the federal deadline. According to her, the suspended extended benefits “are not in a better financial position than those that continued to operate until September.”
“I am happy that West Virginia was able to repay the loan and put West Virginia businesses in good financial position in terms of unemployment benefits,” Young said in an email. She expressed hope that the break benefits “can be hoped for an increase in benefits or an increase in workers’ wages.” Our employees deserve it. “
Additional governors made same prioritybut some observers argued that the money could have been directed towards the direct needs of people affected by the economic turmoil caused by the pandemic.
“For over a year, we have convinced the governor to spend CARES funds on the urgent needs of workers and families. Now that the pandemic is intensifying, he is prioritizing tax cuts for businesses and ending aid to displaced workers, ”said Kelly Allen, executive director of the West Virginia Center for Budget and Policy.
Allen noted the use of federal aid funds to repay the federal loan that supported the state unemployment insurance fund.
“Once again, federal support is helping to increase state revenues and programs by creating the illusion that the state’s economy is stronger than it really is, which could create real problems when aid is exhausted,” she said.
The governor’s office described the financial moves as a matter of long-term planning. The administration clarified that West Virginia is one of the first states in the country to fully pay off an unemployment insurance loan.
“From the very beginning of the pandemic, I knew that we must plan both short and long term so that our condition can recover as quickly as possible and continue to build on all of our recent successes,” Justice said. …
States covid-19 transparency page The government auditor reveals a recent payment of $ 185 million to Truist, which resulted from the BB&T merger. That still leaves over $ 388 million in West Virginia in CARES Act funds disbursed to the state in the spring of 2020.
If the loan had not been paid by September 4, 2021, West Virginia employers would experience a mandatory increase in their unemployment insurance premiums, the administration said.
In a statement released by the administration, State Commerce Secretary Ed Ganch praised the governor’s financial foresight.
“I remain in awe of the Justice Governor’s ability to cope with seemingly dire financial circumstances and reverse the situation to create a positive situation,” Gaanch said.