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DEW director: unemployment trust fund at $590M; agency urges cautious tax-setting
Summary
Director Cheryl Stanton told a joint Labor, Commerce and Industry review committee the unemployment insurance trust fund held more than $590 million as of April 30 and outlined the agency’s five‑year plan to rebuild reserves while keeping employer tax rates competitive.
Cheryl Stanton, director of the South Carolina Department of Employment and Workforce, told the joint committee reviewing her performance that the agency has rebuilt the unemployment insurance trust fund and is monitoring collections closely. “We have a reserve as of April 30 of over $590,000,000 in the trust fund balance,” Stanton said.
Stanton said the agency has reduced problem claims and overpayments since she took office and has focused on both timely payments to claimants and correct charge‑back handling for employers. She told lawmakers the reserve target is set by a statutory formula tied to three historically worst recessions and the taxable wage base, and that the figure changes as wage growth alters the base. She cited prior estimates that the statutory reserve could be between $946 million and $970 million by 2020, depending on wage growth.
Committee members pressed for clarity about the timing and inclusion of tax payments in the April 30 snapshot and whether the five‑year rebuild schedule was overtaxing employers. Stanton acknowledged some employer payments arrive after April 30 and offered to provide updated figures once late payments are processed.
On tax setting, Stanton said the agency consults with federal partners when projecting benefit payouts and taxable wages and revisits rates each September as required by statute. She described the agency’s three‑part approach: project next year’s benefits, set aside reserves for rebuilding, and aim to avoid sudden large hikes in year five that could harm employers.
Lawmakers repeatedly raised concerns about timing and the distributional impact of tax reductions and increases. Stanton said the agency watches weekly indicators — including initial claims and weekly benefit payouts, which she said were “hovering at about 2.8 to 3,000,000 dollars in benefit payouts a week” — and will brief the legislature if trends threaten reserve goals. The committee did not take legislative action at the meeting; discussion concluded with staff offering to provide updated trust fund and collection data.
