Several S.C. businesses won’t have to pay more taxes to support unemployment insurance trust fund

CARES Act Funding and mitigation planning from state agencies prevented rates from being doubled in 2021

COLUMBIA, S.C. (WOLO) — Even though the COVID-19 pandemic has taken its toll on the economy, South Carolina leaders are confident the state’s in the midst of a comeback.

On Thursday, Gov. Henry McMaster (R-SC) announced that most businesses won’t have to pay more taxes to support the state’s unemployment insurance trust fund.

If it wasn’t for $920 million in CARES Act funding to freeze 2021 tax rates at their 2020 levels as well as rebuilding efforts dating back to the Great Recession, some businesses would have had to pay double their usual contribution to the unemployment insurance trust fund, something that would save the state’s employers about $172.4 million.

This is what state leaders call the latest step in the state’s economic comeback after the pandemic wreaked havoc this spring. As of September, some had already seen signs of recovery.

“By September, the unemployment rate was back down to 5.1%, the job numbers were back up 2,269,000, and the number of unemployed had dropped from 303,000 down to 121,000,” said Dan Ellzey, the Director of South Carolina’s Department of Employment and Workforce (DEW).

Gov. McMaster credited the state’s employment agency for their role in making sure the unemployment insurance trust fund was well stocked and able to survive another economic setback.

“We collaborated, we cooperated, and we took a very careful, methodical, determined approach, and it has paid off for the people of South Carolina, and now we’re in a position to accelerate even more, and grow out of this pandemic,” Gov. McMaster said.

Even though 10% of small businesses have closed as a result of the pandemic, some economic officials say the progress made by other businesses after the state reopened should pave the way for more economic progress.

“As the Governor has always said, the business of South Carolina is business, and being able to work together in bringing all of our folks back to work, small and large, is so important of all of us, and this is one big step going forward,” said Ben Homeyer, the South Carolina Director of the National Federation of Independent Businesses (NFIB).

While the rates will be frozen at 2020 levels, DEW stresses that some businesses may have their rate adjusted based on their unemployment claim activity reported prior to the pandemic that was not caused by COVID-19.

DEW says more than 774,000 unemployment claims have been filed in South Carolina since the beginning of March. This past week, only 3,627 people filed for unemployment, one of the lowest totals since the pandemic began.