 |
New York Times...
Most States Seen
Raising Jobless Tax on Businesses
By Michael Cooper
April 27, 2011
As persistently high unemployment has drained the funds that are used
to pay jobless benefits, more than two-thirds of the states expect to
raise taxes on businesses this year to replenish them, according to a
survey of labor agencies released Wednesday.
Unemployment taxes remain low by historical standards: the survey, by
the National Association of State Workforce Agencies, found that states
have effectively cut the unemployment tax rate on businesses by 64
percent since the unemployment program began collecting taxes from
employers in 1938.
The stubbornly high unemployment that has upended the lives of millions
of Americans has also depleted the unemployment trust funds of most
states: 32 of them owe the federal government more than $48.3 billion
that they borrowed to continue paying jobless benefits.
Unless Congress acts, that money will have to be repaid — with
interest. The survey found that seven states were thinking about
borrowing from the private sector to repay the loans.
Some analysts say that states kept unemployment taxes too low during
boom years, so their trust funds were ill-prepared to weather the
downturn. Now states find themselves forced to raise taxes on employers
just as they need them to create jobs, and to consider cutting benefits
while huge numbers of people are relying on them to survive.
Richard A. Hobbie, the executive director of the association of work
force agencies, said the survey found that states would collect an
average of 16.5 percent more in unemployment insurance taxes this year
than they did last year.
The survey did not measure reductions to benefits. Michigan recently
decided to pay only 20 weeks of jobless benefits, down from the 26
weeks that most states pay, and other states are following its lead.
(The federal government pays for extended benefits after the state
benefits run out.) Other states are capping or reducing the amount of
money they pay in benefits.
George Wentworth, a senior staff lawyer for the National Employment Law
Project, said an unusually large number of states were contemplating
benefit cuts. “A number of state legislatures are looking at reducing
benefits as one of the ways to try to restore solvency, even though in
most states it’s not going to get you there,” he said. “It really
erodes the stimulus aspect of the program, and it undermines its
purpose, which is to provide workers with a partial wage replacement
that they can manage on until they find another job.”
Read it at the New York Times
|
