Rhode Island has repaid funds the state borrowed to cover unemployment insurance benefit payments, Gov. Lincoln Chafee announced in Cranston on Nov. 10.
Since March 2009, the U.S. Treasury has loaned the state $905 million to assist unemployed Rhode Islanders through the recession. According to Chafee, with the final payment of roughly $2.7 million to the U.S. Treasury six months early, businesses will save more than $50 million in 2015 - including $36 million in Federal Unemployment Tax Act payments and $14.5 million in interest assessment taxes.
Rhode Island's 32,000 employers — who pay for the Unemployment Insurance Trust Fund — will save $45 million more in FUTA taxes in 2016.
"This is a big win for Rhode Islanders and our business community," said Chafee, who did not run for re-election. "In 2011, my administration faced a huge challenge with an insolvent unemployment insurance system, an existing UI loan and a lack of a plan to repair the system or repay the loan.
"By borrowing from Treasury, we spared the business community the burden of repaying the loan. That was our only course of action acceptable to me."