UPDATED: Oct. 29, 2015 3:01 p.m.
ANNAPOLIS, Md. — As fewer Maryland residents have applied for unemployment benefits, the state’s unemployment insurance tax rate for businesses is set to go down next year, state officials said Thursday.
The rate will drop to the lowest possible level allowed under state law, Gov. Larry Hogan announced, because the state’s Unemployment Insurance Trust Fund has grown by more than $125 million since January.
“The general statement is that we’ve had less money going out to unemployment-insured claimants to deplete the fund,” said Kelly Schulz, the secretary of the Maryland Department of Labor, Licensing and Regulation.
Maryland paid out more than $100 million less in fiscal year 2015, which ended July 1, than it did in the previous fiscal year, said Dennis Morton, the state’s acting assistant secretary for unemployment insurance.
The fund reached about $983.7 million as of Sept. 30. That high balance will trigger the automatic rate change next year. The change means Maryland employers will pay between $25.50 and $127.50 less per employee per year than what was paid by businesses under the current rate.
Higher rates paid in the aftermath of the recession when unemployment was higher caused heartburn in the state’s business community.
In 2010, Maryland borrowed $133 million from the federal government to cover jobless benefits. While the money was repaid within a year at no interest, the state went to the highest tax-rate table, or “Table F,” for three years to get out of the hole, Morton said.
The state will be moving to “Table A,” which is a range of unemployment insurance tax rates between .03 percent and 7.5 percent of the first $8,500 in wages paid to employees. This year, “Table B” was in effect with a range of tax rates of 0.6 percent to 9 percent of the first $8,500 in annual wages.
Because most Maryland employers pay the minimum rate, many companies will see a 50 percent reduction in unemployment insurance from $51.00 to $25.50 per employee each year, according to the Hogan administration.
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