Renee Olson, administrator of the state Employment Security Division, on Friday signed regulations imposing unemployment insurance rates for calendar year 2018 on Nevada businesses.
The state insurance rate will remain the same and, with the 0.05 percent statutory education assessment, will total 2 percent.
That is significantly lower than the 2.63 percent this year because the state has now paid off the $592 million in bonds used to pay the federal government back for loans taken during the recession.
Unemployment peaked at some 14 percent during the worst of the recession, which rapidly drained the more than $700 million in Nevada’s UI trust fund and forced the state to borrow upward of $800 million.
Bonding to pay back the federal treasury enabled the state to get an interest rate far lower than what the government would have charged Nevada. It took four years to pay off those bonds this month and now the 0.63 percent that covered the bond payments is no longer needed.
While that seems like a small reduction, Employment Security Economist Alex Capello told the Employment Security Council it saves businesses an average of $192 per employee over the coming year.
When the final hearing on the regulation was held Thursday, Paul Maratkin of the Las Vegas Metro Chamber of Commerce said it will save the average business upward of $610 a year.
“We view this as a tax break for our members,” he testified.
The insurance rate paid by Nevada businesses ranges from 5.4 percent to a quarter of a percent depending on employee turnover in each of those businesses but the average comes to 2 percent.
As of this past week, the trust fund had recovered and contained just over $1 billion. Staff economists say the goal is to reach $1.34 billion by the end of 2018, which they say should be enough to carry Nevada through a new recession without borrowing.