No change seen in jobless tax rate for Nevada

Tuesday, Oct. 17, 2000 | 10:14 a.m.

RENO -- Nevada's economy is predicted to taper off slightly next year, but businesses apparently won't be paying higher taxes into the trust fund that supports unemployment benefits.

The state Employment Security Council voted Monday to continue the 1.34 percent tax rate paid by the more than 44,000 employers, based on the salary of their workers. The council was told that Nevada's rate was the 35th lowest in the nation.

Birgit Baker, administrator of the Employment Security Department, will hold a public hearing Nov. 21 in Carson City to formally set the rate but traditionally the director has followed the recommendation of the advisory council.

The tax will yield an estimated $229.2 million and keep the trust fund financially sound to pay out benefits if there is an unexpected upturn in unemployment.

Workers who lose their jobs can now qualify for a maximum of $291 a week. That figure will be adjusted, probably upward, next July.

Employers pay the tax rate this year on the first $19,600 earned by a worker. Next year, the business will pay the same rate on the first $20,300 paid an employee.

The tax rate ranges from a low of .25 percent to a high of 5.4 percent and is based on the turnover of a business. Jim Shelly of the department noted that 43.8 percent of the employers paid the lowest rate at .25 percent. And 69 percent pay a rate of less than 1 percent.

New employers pay a rate of 2.95 percent for three to four years until they get an "experience" rating on their turnover.

Robert Murdock, head of research and analysis in the division, told the council that the 4.5 percent growth in jobs will drop slightly next year but he said "Most states would love to have that."

"Ninety percent of new jobs are going to Southern Nevada," Murdock said. Reno will have 7 percent and rural Nevada will get 3 percent of the new employment opportunities.

Unemployment, he projected, will rise from its present 3.8 percent to 4 percent next year and 4.2 percent the following year.

"Generally, there will be a healthy economy," Murdock said.

Under questioning from council members, Murdock said he had no predictions on how a national gaming tax -- which is unlikely to be enacted anytime soon -- or expanded Indian gambling might affect Nevada.

But economist Gary Lungstrum of the department said the "wild card" in the economy is oil. "That needs to be watched," he said.

While gasoline prices have increased in recent months, it has not impacted the tourist industry so far.

Lungstrum said Pennsylvania has the highest unemployment tax rate at 3.7 percent while Utah is low at .6 percent. California is at 2.7 percent.

The trust fund had an ending balance of $505.2 million when it was measured Sept. 30. If things go according to predictions, the balance next year will be $549.8 million.