Hoeven Announces Unemployment Tax Rate Cut, Commends Job Service North Dakota For Strong Performance

Hoeven Announces Unemployment Tax Rate Cut, Commends Job Service North Dakota For Strong Performance

Gov. John Hoeven today announced a reduction in the average unemployment tax rate from 1.35 percent to 1.15 percent, a move that will save businesses millions of dollars in premiums next year. The 2007 unemployment insurance tax rates will range from .34 to 8.09 percent, depending on the employer's unemployment claims experience.

"Continued strong economic growth, fewer unemployment claims, and higher wages in North Dakota have allowed us reduce the unemployment insurance tax rates," Hoeven said. "This rate reduction will save businesses an estimated $8.5 million in taxes next year."

At the same time, the Governor commended Job Service North Dakota for its outstanding efforts in providing workforce services to the state. He cited three specific areas in which Job Service has excelled:

* Employers in North Dakota will see a reduction in their unemployment insurance tax rates in the coming year.
* The U.S. Department of Labor has awarded Job Service one of its top honors in the nation.
* Strong fiscal management has resulted in cost savings to the state by adopting alternative methods to modernize the Unemployment Insurance technology system.

"Whenever we reduce the cost of doing business like this in North Dakota, we strengthen our business climate and make it more attractive for businesses to locate or expand in North Dakota," Hoeven said. "That in turn creates the kind of strong employment levels and significant job growth we've seen across the board in North Dakota, including manufacturing, retail, service industries and the energy sector."

Job Service has been recognized as one of the five top performing states for performance excellence within the unemployment insurance program. Job Service North Dakota is considered the top performer nationally for timely and high-quality appeals decisions.

This honor establishes that workers and businesses in North Dakota are receiving outstanding service by getting timely, accurate determinations from Job Service North Dakota in unemployment matters.

According to Maren Daley, Job Service North Dakota's executive director, the Unemployment Insurance Trust Fund is maintaining a strong reserve level, which permits the 2007 rate reduction and aids in sustaining predictable unemployment insurance tax rates for businesses going forward. Daley noted that the 2007 tax rate notices will be mailed to employers on December 5, 2006.

Job Service has also worked to find a cost effective solution to its Unemployment Insurance computer system upgrade. Initially, the projected cost would have been $40 million, but through diligence and creativity, the agency has developed a system that will cost $15 million, all of which will be covered by federal dollars. By ensuring continued service during this project, Job Service has reduced the risk normally associated with large information technology projects and has displayed foresight in its proactive approach.

"Job Service has done an outstanding job of serving the customers of the state's workforce system efficiently while maintaining an effective business approach," said Daley. "We're working hard to make sure our Unemployment Insurance system serves North Dakotans in a cost-effective way that helps create a strong business climate and quality jobs."

http://www.governor.state.nd.us/media/news-releases/2006/11/061122.html