To the Editor,

This week, Senate Republicans passed a bill that immediately pays off the state’s $1.2 billion in Unemployment Insurance (UI) debt to the federal government and replenishes the UI reserve account. The total amount of this bill is $2.73 billion. This debt has accrued interest for far too long, and it’s high-time we take care of this.

Two years ago, in Jan., 2020—prior to the effects of Covid—the UI Trust Fund balance stood at $1.7 billion. Due to the emergence of Covid and the ensuing Governor’s mandated business shutdowns, Unemployment Insurance claims drained the fund’s reserve and created a negative balance of $1.2 billion in debt. Since then, our State has accrued over $8 million in interest debt alone, all still owed to the federal government. Minnesota is currently paying over $50,000 a day in interest charges for this loan. That is simply inexcusable, this debt and the interest that is being added on every day should never have happened. Governor Walz had more than enough American Rescue Plan Act (ARPA) money to pay this debt off last year and he elected to not do it.  

We promised our main street businesses that they would not be penalized with rising UI premiums because their employees drew Unemployment Insurance Fund dollars due to the administration’s mandated closings. Main street businesses should not be penalized because they did not cause the layoffs.

This bill to pay off our debt to the federal government and replenish the reserve account also has language to hold the Additional Assessment account to zero percent increase for 2022 and 2023. The Special Assessment account is also held to a zero percent increase for 2022. Again, our main street businesses should not be assessed a higher premium rate because the administration forced them to close, and their employees filed for unemployment benefits.  

Paying off this debt is also beneficial to employees across the state. If we successfully pay down this debt and replenish the fund, we’re ensuring that employees continue to have this fund available for future use. This was a critical benefit to employees throughout the past two years, and we need to preserve and protect it. Employees shouldn’t suffer for a bill left unpaid by our administration.  

The bottom line is that paying this debt helps main street businesses, and it helps employees—it’s in everyone’s best interest to get this done. Until our UI trust fund reaches a level considered “adequate” by the federal government, Minnesota businesses will be penalized through higher premiums to increase the funding, with these potential costs being passed onto consumers. According to the Department of Employment and Economic Development (DEED), it would take over 10 years of additional higher taxes on businesses to replenish the UI trust funds.  

We cannot allow our businesses and taxpayers to bear the brunt of this cost. It’s time we take care of this debt, and in turn, take care of small businesses and their employees. 

Sen. Paul Utke

Park Rapids, Minn.