A new, if completely cynical, means of funding state governments was recently brought to my attention by Michael Ashton at E-piphany who received a letter from the Department of Labor stating in part:
“The New Jersey Department of Labor and Workforce Development (Department) was required to borrow funds from the United States Treasury in order to pay Unemployment Insurance benefits. Payment of the interest on the outstanding loan balance starting January 1, 2011 is due September 30, 2011.
“As required by N.J.S.A. 43:21-14.3, the Department must assess all employers for the interest due…
“The calculation of your Federal Loan Interest Assessment for 2011 is shown below. Payment is due 30 days from the mailing date of this notice. After 30 days, interest will accrue at the statutory rate of 15% per year.”
Now, my assumption here is that New Jersey's Department of Labor received this Federal loan at rates much lower than the 15%. So, all governments appear to need to become revenue positive is borrow funds from the Feds for things that employers are mandated to pay then pass the costs on at a significant APR to said employers with a minimal window for payment without penalty.
No comments:
Post a Comment