Gov. John Hickenlooper and Treasurer Walker Stapleton recently announced that a bond sale in late June will lower unemployment costs for Colorado’s businesses by up to $120 per employee and help restore solvency to the state’s unemployment insurance system.
Colorado employers pay into the state Unemployment Insurance Trust Fund, which has struggled for financial stability since the recession of 2002, causing employers to be hit with extra surcharges. The recession of 2008 significantly worsened the problem, and the fund’s negative balance has reached an excess of $600 million.
To erase a negative balance, proceeds from the new bond issue will be put toward the Fund. This will eliminate additional solvency surcharges that have been assessed to Colorado employers since 2004, contributing to overall employer savings from $20 to up to $120 per worker beginning next year.
The bond issue that totaled $640 million in proceeds, executed through the Colorado Housing and Finance Authority, was made possible through bipartisan legislation, H.B. 12S-1002 “Unemployment Insurance Revenue Bonds,” sponsored this year by Reps. Larry Liston and Daniel Pabon and Sen. Cheri Jahn. The bonds will be repaid over time, and the costs to Colorado businesses will be significantly lower than if the fund were allowed to continue to run at a negative balance.
A fact sheet about the changes has been created by the state and is available at www.coloradoui.gov. It will be mailed to Colorado employers and e-mailed to employers in the state’s DLE database (DLE Press Release, 7/2/2012).