Focus on Relieving Unemployment Costs

This post is in partnership with the National Council of Nonprofits (NCN). Common Good Vermont is an Ally member of NCN.

States, including Vermont, are beginning to use some of their share of Coronavirus State and Local Coronavirus Fiscal Recovery Funds allocated under the American Rescue Plan Act (ARPA) to reduce the pandemic-related unemployment costs of employers forced to lay off staff.

Here are some recent examples of that relief:

  • Ignoring Experience RatingsVermont enacted a law that excludes employer unemployment claims experiences in 2020 from future unemployment tax rate calculations. The relief is expected to save contributing employers an estimated $400 million.
  • Replenishing State Unemployment Trust Funds: Last month Louisiana lawmakers enacted a budget bill that appropriates $400 million in ARPA funds to bring the Louisiana Unemployment Compensation Fund up to pre-pandemic levels. As a result, the state will avoid automatic tax increases on contributing nonprofit and for-profit employers, i.e., those that make quarterly contributions into the state unemployment system. Earlier this year, Maryland agreed on a spending plan that calls for using $1.1 billion of the state’s ARPA funds to shore up the state’s unemployment insurance trust fund.
  • Paying Off UI Loans: During the pandemic, Ohio ran up a nearly $1.5 billion loan debt at the U.S. Labor Department to keep the state’s unemployment system solvent. Late last month, the Governor signed legislation to pay off that loan and prevent unemployment tax increases of between 50% and 150% over the next three years. Presently, 17 states owe more than $53 billion in unemployment loans to the Labor Department.
  • Covering Reimbursing Employers: Newly enacted legislation in New Jersey provides full unemployment relief to reimbursing employers – nonprofits and local governments that in the past elected to reimburse the state for the costs of unemployment benefits paid to former employees. The Garden State joins nearly twenty others that provided some relief during the pandemic to reimbursing employers.

Read the Special Report, Strengthening State and Local Economies in Partnership with Nonprofits, for more ideas for investing ARPA funds to support the work of charitable nonprofits.