Parson Transfers $300M in Relief to Unemployment Funds

Governor Mike Parson has authorized a transfer of $300 million in federal Coronavirus Relief Funds from the State Treasury into the state’s Unemployment Insurance Trust Fund. These funds will help keep the Trust Fund balance above the level that would trigger an increase in contribution tax rates for Missouri businesses.

“With over 96% of Missouri’s businesses employing 50 or fewer employees, these additional funds will help prevent tax increases for our small businesses and strengthen the UI Trust Fund,” Governor Parson said. “Despite the unprecedented rise in unemployment caused by COVID-19 this past year, our economy continues to come back strong as businesses reopen and Missourians get back to work. We have come a long way since the early days of this pandemic, and an increase in taxes is the last thing Missouri employers need as we continue our recovery.”

The state’s Unemployment Insurance Trust Fund from which state unemployment benefits are provided to eligible workers who have lost their jobs is funded through Missouri employers. Missouri businesses would have likely seen an increase in their unemployment taxes without this action to replenish the Trust Fund.

“Small businesses employ over 45 percent of our workforce here in the state. These funds will provide those employers a better sense of economic security encouraging them to employ or re-employ workers. These efforts are critical to allowing small businesses to reopen, recover, and grow,”

Department of Labor and Industrial Relations Director Anna Hui said. “We continue to look for ways to be fiscally responsible in assisting businesses and individuals in the state in recovering from the pandemic. Today’s action helps businesses by enabling them to employ more workers and create sustainable economic prosperity across Missouri.”

The transfer of CRF funds goes with the Public Order that the Missouri Department of Labor and Industrial Relations issued last December under Parson’s Executive Order. That Order was written to prevent increases in unemployment tax rates that are triggered when the average Trust Fund balance dips too low.

This fund transfer will help Missouri avoid borrowing money to pay unemployment benefits like twenty other states have and now have depleted their Trust Funds.

As of February 2021, Missouri’s unemployment rate stands at 4.2 percent, below the national average of 6.2 percent. Missouri ranked twelfth lowest in the nation in unemployment in January 2021.

KPGZ News - Brian Watts contributed to this story