No hike expected for Nevada unemployment taxes

Monday, Oct. 14, 1996 | 11:59 a.m.

CARSON CITY -- A state trust fund used to pay unemployment benefits is solvent and that should mean continued low tax premiums for an estimated 35,000 Nevada businesses next year.

The fund, measured on Sept. 30, totaled $337.5 million, or $94.7 million above what is required to pass the solvency test. The extra money is needed to pay benefits in the event of a long-term downturn in the economy.

The state Employment Security Advisory Council meets Thursday in Reno to make a recommendation on the premium rates employers should pay in 1996. The average tax today is 1.5 percent of the first $17,200 in salary paid to a worker.

Stan Jones, director of the state Employment Security Division, predicted Friday there would be a "strong economy" in the jobs market for next year. But he said he has not received a report from staff on what the recommended rate should be.

Jones makes the final decision on the rate but usually follows the advisory council's recommendation.

Council Chairman Paul Havas of Reno said Nevada's economy is in "pretty good shape and getting stronger." But he added, "We won't go in and automatically drop the rate because of the glowing news."

He said the state must have a "safety net" to ride out a "worst-case scenario." He cited past situations where the state became "over-enthusiastic" and reduced the rate too low.

"We must maintain a rate that will protect ourselves for the future," Havas said.

Employer tax rates range from a low of 0.3 percent to a high of 5.4 percent, depending on the turnover in the business. New employers to the state pay an average 3 percent premium for several years until they establish an experience factor -- a track record for worker stability.

Of employers with an experience rating, 34.1 percent pay the lowest tax rate while 4.7 percent are hit by the largest premium.

This year, Nevada's average 1.5 percent is among the lowest 20 rates in the nation.

A jobless person can receive from $16 to $247 per week in unemployment checks for 26 weeks. The average payment is $192, and the average time for a worker receiving benefits is 13.1 weeks.