DETR: Debt paid on unemployment trust fund before interest came due

Local News

LAS VEGAS (KLAS) — Anyone who has ever had credit card debt knows it’s the interest that kills you.

Nevada has emerged from the pandemic without owing any interest on debts that built up as it paid millions in unemployment claims, according to the Department of Employment, Training and Rehabilitation (DETR).

Nearly $2 billion that was in the trust fund was wiped out in the first nine months of the pandemic. After that, the state borrowed money — $332.4 million — from the Social Security Administration to cover the payments.

And the interest was about to come due.

Nevada has now paid off the debt using eligible funds from the American Rescue Plan Act, eliminating the need for businesses to bear the brunt of repaying the loan or the interest.

(Stateof NevadaWeekly UI FilingStatisticsforWeekEnding 10/09/2021)

Unemployment insurance payments have already started to rebuild the trust fund, according to a graph from DETR.

In January, 8NewsNow reported that the trust fund had been wiped out. The balance is out of the red and now at an estimated $200 million.

“This was a behind-the-scenes win, and an immense benefit to Nevadans. It took building up a huge surplus in the trust fund in recovering from the Great Recession, which involved buy-in from employers and the Employment Security Council, so that we had the funds in place to make it to December 2020 before Nevada needed to start borrowing,” said David Schmidt, Chief State Economist.

The Nevada Legislature and Gov. Steve Sisolak put the mechanisms in place to repay the Social Security Administration and avoid any interest on the debt.

“It took a massive investment at the federal level, making funds available for just such a purpose – something I’ve not seen done, even in the Great Recession. It took the support of the Governor and Legislature, appropriating a significant amount of money to repay this loan, and making it a priority in SB-461,” Schmidt said.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

8 news now breaking and daily news sign up


Pro Football Challenge

Don't Miss

Trending Stories