Wednesday, September 27, 2006
Contact: Spence Jackson, 573-751-0290
Federal Government Gives Tentative Approval to Blunt’s Request for Tax Credit Avoidance for Missouri Employers
JEFFERSON CITY–Gov. Matt Blunt today announced the U.S. Department of Labor has given conditional approval to his application for avoidance of $102.8 million in federal tax credit reductions given to Missouri employers. The request dates back to June 2006, when Blunt sent an Application for Avoidance of Tax Credit Reduction to the U.S. Secretary of Labor.
“This initial approval from the federal Department of Labor is great news for Missouri’s employers,” Blunt said. “Missouri’s economy is moving forward with more than 54,000 new jobs since January 2005 and this avoidance will preserve the growth Missouri has experienced.”
In 2003 and 2004, the Missouri Division of Employment Security borrowed money from the federal government to pay for unemployment insurance benefits. Due to the length of time the state borrowed money from the federal government without repayment, Missouri was in jeopardy of losing Federal Unemployment Tax Act (FUTA) credits for its employers. When Blunt took office in January 2005 the state owed the federal government $288 million.
The U.S. Department of Labor determined Missouri met the requirements in order to receive conditional approval. It is expected that final approval will be granted by the federal government in November. The governor, with the assistance of the state’s Labor Department will continue to closely monitor the Unemployment Compensation Trust Fund to avoid future FUTA credit reductions until the federal debt is repaid.
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