Unlike the Apologist in Chief, many like to blame the new guy for the 8 years of the previous saddle-headed governor, who never met an entitlement (or vote) he didn't think he could buy. And here's the cost; there is going to be alot of "Baksheesh, Sahib!" for awhile yet...but it's a step in the right direction.
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Wisconsin owes U.S. $1.18 billion on unemployment borrowing
e-mail print By Don Walker of the Journal Sentinel
Oct. 23, 2011 |(181) Comments
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Wisconsin owes U.S. $1.18 billion on unemployment borrowing
Walker's job goal may be tough to meet
The state of Wisconsin still owes the federal government a whopping $1.18 billion it borrowed to pay unemployment benefits to the jobless.
Despite the fragile state of the economy, the state is working on ways to repay the federal government. It is doing so in a variety of ways:
Special assessments against businesses to pay the interest the federal government is charging states.
A one-week waiting period for people seeking unemployment benefits.
An increase in the taxable wage base the state uses to calculate what companies owe.
A requirement that residents filing new claims register first with the Wisconsin Job Service and actively search for work.
Proposed legislation that sharply increases the penalty for fraud.
Among the 27 states that owe the federal government money, Wisconsin ranks 11th. California is first, with $8.63 billion owed.
A new study on unemployment insurance by the Tax Foundation, a Washington, D.C.-based nonpartisan research organization, finds that businesses nationwide are in danger of facing higher unemployment insurance taxes at a time when private-sector hiring is low.
Craig Barkelar, administrator of the Department of Workforce Development's division of unemployment insurance, said last week that Wisconsin has paid $42.4 million in interest payments owed between Jan. 1 and Sept. 30 to the federal government. The state did so, he said, to avoid losing administrative reimbursement costs that the federal government pays Wisconsin.
The federal interest rate is 3%. It used to be 4%.
Employer payment
In Wisconsin, an employer pays unemployment insurance taxes on each employee's taxable wages. Taxable wages are the first $13,000 of each employee's total annual wages. The taxable wage base was $12,000 per employee in 2009 and will rise to $14,000 in 2013.
The tax rate that Wisconsin businesses must pay varies from about 0.3% to nearly 10%, and the rate is based on a formula tied to the amount a company has paid into the system.
The one-week waiting period for payment of unemployment benefits takes effect Jan. 1 and will save money in the long run. It is not the first time a waiting period has been enforced, Barkelar said.
Barkelar's division also has been working to recover overpayments to jobless recipients. To date, the Division of Unemployment Insurance has been able to collect 79% of all overpayments that have been discovered.
And it's getting better at it.
Going up
In 2009, the agency recovered $31 million in overpayments. In 2010, it was $35.3 million. And through Oct. 18, a total of $36.1 million in overpayments has been recovered.
Currently, overpayments exceed $100 million.
The division has legal authority to issue levies and warrants, intercept federal and state tax refunds, garnish wages and offset jobless payments made in other states.
At the same time, state officials are hoping the economy will improve.
"As wages and jobs grow, the number of people needing benefits decreases and revenue coming in from unemployment insurance taxes increases," Barkelar said.
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Debtor states
Twenty-seven states, including Wisconsin, still owe money to the federal government after borrowing to pay unemployment benefits.
1. California : $8.63 billion
2. Michigan: $3.14 billion
3. New York: $2.89 billion
4. Pennsylvania: $2.80 billion
5. Ohio: $2.61 billion
6. North Carolina: $2.45 billion
7. Illinois: $1.89 billion
8. Indiana: $1.86 billion
9. Florida: $1.55 billion
10. New Jersey: $1.25 billion
11. WISCONSIN: $1.18 BILLION
12. South Carolina: $966 million
13. Kentucky: $949 million
14. Connecticut: $810 million
15. Nevada: $773 million
16. Missouri: $725 million
17. Georgia: $721 million
18. Arkansas: $360 million
19. Arizona: $291 million
20. Colorado: $259 million
21. Rhode Island: $240 million
22. Minnesota: $228 million
23. Kansas: $171 million
24. Virginia: $169 million
25. Vermont: $77 million
26. Delaware: $62 million
27. Alabama: $23 million