 Surplus Federal Unemployment Tax Act Funds will Lower Employer Taxes April 26, 2002
According to the news release, the state's share of the $8 billion distribution, $14.8 million, was recently deposited into the Alaska account of the Federal Unemployment Insurance Trust Fund. Federal law restricts the use of these funds to Unemployment Insurance (UI) program administration and benefit payment, and the administration of the Employment Services program as defined by the federal Wagner-Peyser Act. "Most of these funds will be used for a one-year reduction of employer tax contributions to the Unemployment Insurance Trust Fund and $3 million will be used to provide a web-based labor exchange system available through the Alaska Job Center Network," Knowles said. "With this new system, job seekers will enter employment skills and experience, highlighting and marketing their qualifications on the Internet. Employers will be able to easily search and locate workers with the skills required for specific jobs." State and partner agencies will also use the system to identify area-specific training needs - a feature that parallels Gov. Knowles' focus on economic stability for all Alaskans. The bulk of the funds being returned to the states will have the effect of lowering employer tax contributions to the UI Trust Fund by five percent for one year. For a typical Alaska business, that translates into a one-year savings of approximately $25 per employee. The Fund uses contributions from Alaska employers and workers to pay unemployment benefits. "The short-term impact of this money on the UI Trust Fund will be offset by the end of 2003, and UI taxes will return to the current rates in 2004," said Labor Commissioner Ed Flanagan.
Source of News Release:
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