By Patrick Phillips | November 12, 2020 at 10:46 AM EST - Updated November 12 at 10:47 AM
COLUMBIA, S.C. (WCSC) - South Carolina Gov. Henry McMaster said businesses will not face an unemployment tax increase despite the amount of money the state has payed out in unemployment benefits.
McMaster announced the tax rate freeze Thursday from the Statehouse in Columbia, along with South Carolina Department of Employment and Workforce Executive Director Dan Ellzey and members of the state legislature.
“That is a major accomplishment. And it credit goes to accelerateSC as well as the people you see here today,” McMaster said. "We were very careful when the CARES Act money came in our General Assembly. Listening to accelerateSC that group, their recommendations and discussing and making strong decisions, we determined that of the $1.9 billion, $920 million should go to the unemployment trust fund.
Ellzey said the year began as “extremely promising” with a 2.5% unemployment rate in Februrary.
“Two months later, the bottom had been pulled out from under us and everything turned around,” Ellzey said. “The unemployment rate was up to 12.8%, the number of jobs were down to 2.07 million and the number of unemployed had gone from 59,000 to 303,000.”
He said some sectors, particularly the hospitality and food services industries, had it even worse.
“Many of us lived through the 2009-2009 recession and we all heard the economists say back then, ‘This is it, it can’t get any worse than this unless we go into a new depression,’” Ellzey said. “Well, if you looked at the month of February and March in South Carolina, and the U.S. and compared it to 2008 and 2009, you would say that the Great Recession was pretty mild compared to what we had just gone through.”
The SCDEW told lawmakers that the state’s Unemployment Insurance Trust Fund contained $1.1 billion before the COVID-19 pandemic. But by June, that total had dropped to $685.5 million. Their projections then showed the trust fund would run out of money by the end of the year.
As of Thursday, Ellzey said the state has paid out $886 million from its Unemployment Insurance Trust Fund.
The most recent update to South Carolina’s unemployment rate showed a 5.1% unemployment rate in September.
The news comes as the state announced a small increase in new initial unemployment claims in the week ending Saturday.
Since mid-March, the state has paid out more than $4.5 billion in a combination of state and federal unemployment benefits to people who lost their jobs during the pandemic.
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