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Article written by Zach Pluhacek, and first published in the Lincoln Journal Star

Nebraska employers will save $17.6 million on their unemployment insurance taxes next year, which Gov. Pete Ricketts says is largely thanks to a re-employment program he championed.

Launched last fall, the program seeks to get people back to work faster after they start receiving unemployment benefits.

Weekly unemployment claims dropped 23.9 percent during the first nine months of 2016, outpacing a national decline of 5.2 percent.

And because the unemployment insurance tax rate is based in part on benefits paid, fewer claims mean lower taxes.

"We're helping companies save money," Ricketts said Wednesday at the Capitol. "Tax relief, so they can reinvest."

Nebraska's unemployment insurance tax rate has fallen every year since 2011, when the state made its "final down payment" on the recession, said Labor Commissioner John Albin. Yet state officials determined the re-employment program was the only change that could have caused such a sharp decline this coming year.

The Tax Foundation's 2017 State Business Tax Climate Index ranked Nebraska's unemployment taxes eighth-lowest in the nation.

The state's average tax rate for 2017 will be .75 percent, .25 percent lower than in 2016 and down 2.58 percent compared with 2011.

"We've done this by re-employing people rather than cutting off benefits," Albin said.

The re-employment program started in October 2015 and includes mandatory job coaching and more stringent work-search requirements than previously existed.

Unemployment recipients must now contact at least five potential employers per week and submit at least one formal job application each week. After five weeks, they must submit at least two applications a week and contact potential employers at least three days a week.

The resulting decline in claims has already resulted in $13.4 million in savings this year, Ricketts said.

"We're getting people back into the workforce faster."



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