Scenario 15 Allow FUTA credit reduction in 2011 and 2012. Keep rates for classes 1-12 the same as under current plan. Give savings to 13-20 in the form.

Slides:



Advertisements
Similar presentations
MARKET FOR LOANABLE FUNDS Suppliers are people who save money;Suppliers are people who save money; Demanders are people who borrow money;Demanders are.
Advertisements

Understanding Private Loans Default Prevention. Agenda  Essential loan language  Variable rate language ♦ Types of indexes  Language for all types.
Unemployment Insurance & Employment Service Reform A New Balance.
March 9, 2011 Greater Wenatchee Public Facilities District.
Chapter: 12 BFM Financial Management.
LCI Subcommittee March 1, Seasonal Restrictions Currently in place in 15 states –Arkansas, Arizona, Colorado, Delaware, Indiana, Maine, Massachusetts,
The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Unemployment Insurance Financing Overview.
1 Fiscal Policy CHAPTER 12 © 2003 South-Western/Thomson Learning.
Wealth Transfer Planning Using Private Financing Prepared for Valued Client & Valued Client A Fair Market Loan Arrangement Between Family Members.
SUBPRIME MORTGAGE LOANS Nwo&feature=related.
1 Civil Systems Planning Benefit/Cost Analysis Scott Matthews Courses: and Lecture 9 - 9/29/2002.
Presentation Summary LESE 306 Fall Presentation Process Identify startup business/bank. Assumptions for spreadsheet model made by borrowing teams:
Key Financial Indicators. Measures of liquidity  See equations 1 and 2; page 12 of booklet Measures of solvency  See equations 3 – 6; page 13 of booklet.
1 Capital, Interest, and Corporate Finance Chapter 13 © 2006 Thomson/South-Western.
A FIRST LOOK AT MACROECONOMICS
Commission on Unemployment Compensation Sam Lupica, Acting Commissioner August 14, 2014 Status of the Unemployment Trust Fund and Related Issues.
Interest Formulas – Equal Payment Series
Lesson 8. 1.Estimate the amount of debt needed to achieve the firm’s goals. 2.Understanding the balance sheet and operating statements. 3.Make the needed.
MODULE 4 RATIO ANALYSIS A2 Marketing and Accounting and Finance Gearing.
Monetary Policy In Action: The Bank of Canada’s Monetary Tools.
The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency STATE OF NEVADA Department of Employment,
Lecture 24 Profit-Sharing and Similar Plans
FINANCE IN A CANADIAN SETTING Sixth Canadian Edition Lusztig, Cleary, Schwab.
Ratio Analysis A2 Accounting.
This week its Accounting Theory
2013 Budget Proposal Overview Rev. Ricky Burgess, Finance Chair City Council Budget Office Bill Urbanic, Director November 27, 2012.
© 2011 Cengage Learning created by Dr. Richard S. Savich. California Real Estate Finance Bond, McKenzie, Fesler & Boone Ninth Edition Chapter 4 Adjustable.
Ratio Analysis.
Credit Cards The Essentials to Take Charge of Your Finances In your opinion, do consumers spend more per month on average when they use a credit.
Notebook # 29 Economics 9-2 The Federal Tax System Pages
Interpreting the Accounts (Ratio Analysis). Liquidity ratios Current ratio= current assets current liabilities Acid test= current assets - stock current.
What Problems does a Budget Deficit cause for Government Financing? To see more of our products visit our website at Ruth Tarrant.
Measuring Financial Performance 1 ENTREPRENEURIAL FINANCE.
BALANCE OF PAYMENTS PROBLEMS. Current Account Deficit Current Account Deficit= net outflows on current account greater than net inflows. Made up on the.
The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency UI Overview and Forecasts Employment.
A Balanced Approach To Meeting the Needs of Texas F. Scott McCown, Dick Lavine, Eva DeLuna Castro
Investment/Shareholders
1 Long-Run Economic Growth and Rising Living Standards Economic Growth.
The Non-Income Determinants of Consumption and Saving
Capital Hill Briefing January 24, 2011 How the ACA impacts the
Direct: Mobile: ………………………………....………….. R&D Tax Relief 25 th June 2014.
Illinois Update Where does the State get its revenue? 9.
Using money wisely and effectively to meet your obligations and priorities.
1 EMS/Fire Department Consolidation Treatment of Pension and Service Under the Police/Fire, CSRS, and 401(a) Plans.
Forward-Looking Means-Testing with a Student Loan Tax Credit Thomas J. Kane Harvard Graduate School of Education November, 2005.
OWCP Interagency Meeting Shelby Hallmark, Director Office of Workers’ Compensation Programs November 28, 2007.
The Impacts of Government Borrowing 1. Government Borrowing Affects Investment and the Trade Balance.
Pay It Forward Tuition Model Introducing Increased Equity in Access to Higher Education.
California Real Estate Finance Fesler & Brady 10th Edition
Citizens Research Council of Michigan 1 November 3, 2004 Standard Federal Bank Troy, Michigan Sponsored by Standard Federal Bank; Varnum, Riddering, Schmidt.
Retirement Planning Social Security Social Security is a federal program that taxes you during your working years and uses the funds to make payments.
Credit and Credit Cards Costs and Benefits of Having a Credit Card ©2012, TESCCC.
CHAPTER 12 FINANCIAL MANAGEMENT Financial Planning FINANCIAL PLANNING Ongoing Operations Revenue – all income that a business receives over a period.
PA UC Reform UC Fund Reforms > Pennsylvania’s Unemployment Compensation Debt Repayment and Trust Fund Solvency Restoration 1.
 The more you use these ratios and the more you practice using them the easier it will be to remember the calculations, apply them in your exam and.
Chapter 15 Economics of Aging (c) 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Ratio Analysis…. Types of ratios…  Performance Ratios: Return on capital employed. (Income Statement and Balance Sheet) Gross profit margin (Income Statement)
Welcome to Workforce 3 One U.S. Department of Labor Employment and Training Administration Webinar Date: May 30, 2014 Presented by: Robert Pavosevich Division.
CHAPTER 8 DIVIDEND POLICY. Concept of Dividend Policy Dividend policy involves the decision to –pay out earnings to shareholders –retain them for reinvestment.
Chapter 25 Government Finance in the Full-Employment Model
Social Security GOVT Module 16.
Interest Formulas – Equal Payment Series
Credit and Credit Cards
Quantitative and Scientific Reasoning Project Mathematics in the Real-World: Financial Math Project – Student Loan Budgeting Name Course Lecturer This.
Revenue Laws Study Committee
Credit and Credit Cards
Washington State Employment Security Department
Investment basics Financial Literacy.
Notes on Social Security
This is a study session – no board action is requested I will cover
Presentation transcript:

Scenario 15 Allow FUTA credit reduction in 2011 and Keep rates for classes 1-12 the same as under current plan. Give savings to in the form of reduced rates for 2011 and Surcharge on to cover extra FUTA costs for Sunsets at end of Avoid FUTA reduction beginning in 2013 with voluntary payments under the normal method. (FUTA returns to net 0.8%) 1

Scenario 15 Repays loans in May 2016—one year later than legislated plan. Marginally higher interest costs but absorbed over additional year. Leaves trust fund balance at $0 in 2016 rather than +$200 million. 2

Scenario 15 Rate Class $10.31$11.51$10.93$9.96$10.19$9.18 2$103.83$94.64$90.17$82.87$76.47$ $114.70$104.36$99.40$91.25$84.11$ $126.78$115.15$109.63$100.62$92.48$ $140.20$127.15$121.01$111.01$101.85$ $155.11$140.47$133.63$122.52$112.24$ $171.68$155.28$147.66$135.40$123.77$ $190.09$171.73$163.32$149.65$136.61$ $210.54$190.02$180.62$165.41$150.88$ $233.27$210.33$199.94$183.05$166.60$ $258.52$232.90$221.41$202.56$184.20$ $286.58$257.98$245.16$224.20$203.81$ $503.51$511.75$462.42$422.42$382.20$ $546.43$549.35$513.06$468.58$423.74$ $594.18$591.12$569.27$519.85$469.90$ $647.28$637.56$631.67$576.76$521.23$ $706.19$689.09$701.02$640.04$578.06$ $771.64$746.46$778.19$710.46$641.37$ $844.38$810.09$863.82$788.51$711.75$ $925.28$880.87$959.05$875.42$789.91$ State costs plus extra Federal Cost in 2011 & 2012 shown. 3

Scenario 15 Rate Class $0.00 $0.69$0.61$1.09$0.78 2$0.00 -$0.02-$1.64-$7.09-$5.68 3$0.00 -$0.01-$1.85-$7.80-$6.21 4$0.00 -$0.02-$2.02-$8.71-$7.01 5$0.00 -$0.03-$2.23-$9.65-$7.75 6$0.00 -$0.05-$2.51-$10.72-$8.66 7$0.00 -$0.08-$2.73-$11.91-$9.57 8$0.00 -$0.03-$3.02-$13.22-$ $0.00 -$0.08-$3.42-$14.67-$ $0.00 -$0.04-$3.74-$16.41-$ $0.00 $0.01-$4.19-$18.21-$ $0.00 -$0.04-$4.72-$20.15-$ $39.30$24.77-$0.12-$8.96-$38.61-$ $56.02$9.06-$0.08-$9.94-$42.90-$ $74.54-$8.41-$0.08-$11.04-$47.65-$ $95.08-$27.77-$0.14-$12.32-$52.89-$ $ $49.37-$0.20-$13.68-$58.92-$ $ $73.25-$0.14-$15.10-$65.45-$ $ $99.90-$0.19-$16.88-$72.68-$ $ $ $0.16-$18.65-$80.74-$26.10 Essentially unchangedSavings from repaying 1 yr later 4

Scenario 15 Main concern is that this leaves the trust fund in essentially the same position we found it in at the beginning of the last recession—no funds. Also some concern over ability of agency to predict the employment levels for 2011 in each rate class for purposes of surcharging and crediting (collecting and refunding) FUTA. 5

Risks of Delaying Loan Repayment Recessions occurring approximately every 7 years in modern economic history. By 2016, if benefits trend up, we’d still be repaying loan and interest from recession Contributions would spike again to prevent further borrowing potentially creating a downward recessionary spiral. 6

2016 Scenario 15 $417m benefits (spikes up $100m) $150m continued loan repayment $6.0m continued interest payment $90m cushion against further FUTA increases. Total: $663m Trust Fund: $0 Current $317m benefits $200m trust fund building Would shift $100m to spiked benefit charges. Total: $517m Trust Fund: +$159m 7 Current plan provides better cushion for potentially higher benefits during next recession.

Cost Comparison: 2016 Mild Recession Scenario 15 Current Scenario 15Current Change % % $9.18$8.40 $ % % $94.97$75.84 $ % % $104.59$83.34 $ % % $115.28$91.66 $ % % $127.16$ $ % % $140.35$ $ % % $155.01$ $ % % $171.31$ $ % % $189.41$ $ % % $209.52$ $ % % $231.86$ $ % % $256.69$ $ % % $483.43$ $ % % $536.21$ $ % % $594.86$ $ % % $660.02$ $ % % $732.42$ $ % % $812.87$ $ % % $902.26$ $ % % $1,001.57$ $ Notice, rates spike up over $300 per worker compared to non-recession projections in slide 4. 8

Anomaly Approximately 2,800 firms in classes with positive 7-year balance. Projected tax revenue from firms $44 million Projected tax revenue if capped at class 12 $21 million Would have to absorb difference. Believe cost savings implemented in 2010/2011 should enable fund to absorb lost revenue from fix. 9