Gov. John Hickenlooper and Treasurer Walker Stapleton announced today that a bond sale last week 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.
"This bond issue will reduce unemployment insurance costs to employers while simultaneously maintaining the level of benefits available to Colorado's unemployed workers," Hickenlooper said. "Today's announcement is a good example of how pursuing efficiency and effectiveness in government can help create a more business-friendly environment."
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 reached an excess of $600 million.
"Colorado employers have been hit by a one-two punch from a deep and lingering recession coupled with higher unemployment costs that accompany tough economic times," Stapleton said. "Having an insolvent unemployment trust fund raises those already high costs to employers. Our action provides direct and substantial relief to job-creators and gets the fund back on a more solid footing."
To erase a negative balance in the state Unemployment Insurance Trust Fund, proceeds from a 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, HB12S-1002 "Unemployment Insurance Revenue Bonds," sponsored this year by Reps. Larry Liston and Daniel Pabon and Sen. Cheri Jahn. The bonds will be repaid by businesses 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. The fact sheet will be mailed to Colorado employers and e-mailed to employers in the Colorado Department of Labor and Employment database.