Official: Don’t raise business tax to pay jobless fund

Friday, Sept. 18, 2009 | 3:59 p.m.

State weighs business tax hike for jobless fund (9-16-2009)
Unceasing recession spurs more tax talk (8-14-2009)
Nevada jobless trust fund nearly broke (8-3-2009)
Unemployment benefits in each state (7-27-2009)
Lawmakers hear support for increasing jobless benefits (3-18-2009)
Gibbons undecided about accepting jobless money (3-2-2009)
Jobless fund might be broke by end of year (2-2-2009)

CARSON CITY – The state has applied for a $264 million loan from the federal government to pay more than 100,000 jobless Nevadans but the chairman of an employment council doesn’t want to raise the rates charged to businesses next year.

“My feeling personally is we keep the tax rate as low as possible during this period,” says Paul Havas, chairman of the state’s Employment Security Council.

His feelings echo those of Assembly Speaker Barbara Buckley, D-Las Vegas, who says now is not the time to raise the rates on businesses.

To pay the unemployment checks, more than 60,000 businesses are assessed with a tax rate from 0.25 percent to 5.40 percent on up to $26,600 of the wages of a worker. That wage level will rise to $27,000 next year.

But the state’s jobless fund will be dry in October and it will have to borrow from the federal government. And if the economy doesn’t improve in 2010, the state will have to borrow $1 billion, says Cynthia Jones, administrator of the state Division of Employment Security.

While the rates to employers could increase, the weekly checks to the jobless will not be lowered, says Kelly Karch, deputy administrator of the state Division of Employment Security.

The maximum payout now to an unemployed person is $400 a week plus an extra $25 thrown in by the federal government. The payment level is set in the law, Karch said.

The nine-member council meets Oct. 6 to make its recommendation to Jones, who makes the final decision Dec. 7.

Havas says he hasn’t received the information for the meeting from the state agency. But he adds, “I want to keep rates as low as possible with a counter cyclical approach to this.”

“We can’t raise the rates with this type of economy,” said Havas, a Reno businessman.

The average rate now is 1.3 percent with the payment of $353 per year per employee. New businesses must pay a 2.95 percent rate for about three years and then they receive an “experience rating” based on their worker turnover.

About 55 percent of businesses have the "experience rating."

The state is asking to borrow $48 million in October from the federal government, $120 million in November and $96 million in December to pay the unemployed, he said.

Havas said his concern is with the economy in 2010 and will it pick up.

Jones said the state is now sending out about $35 million in jobless benefits a week to an estimated 110,000 recipients.

The council will take public comments at its meeting.

Discussion: 11 comments so far…

By aoxomoxa

9/18/09 at 4:32 p.m.

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We have an industry that will extract almost $ 8 billion dollars of a non-renewable resource gold)
from Nevada this year. The Legislative Council Bureau (state gov't think tank) estimates that Nevada's Gold tax will raise $23-28 million dollars from the mining companies during the year. That equates to .oo4%. Yes the mines pay good wages and they and their employees buy things (sales tax). Aren't we in this together. As citizens we must demand more for our treasure. This is a clear gift to the multi-national corporations. The mining industry spent the most money and exerted a stranglehold on our elected officials last legislative session. We must throw them out and pass laws to force them to pay their fair share to support our infrastructure and government. Enough!
By neiman1

9/18/09 at 5:08 p.m.

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I thought all the unemployment funds were free money. Didn't the stimulus plan offer extended funds to the people that was all free?

Do you mean the state has to pay more than it used to and now has to pay it back? Is this like all the other promises of Free money. Are we really going to have to pay it back.

Uh oh. That's not so free.
By Judy

9/18/09 at 6:35 p.m.

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Amazing. Borrow money from the fed instead of having businesses and mining pay their FAIR SHARE.
Idiotic.
By afveteran

9/18/09 at 6:42 p.m.

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The solution is simple. When the unemployment stash disappears, quit paying out period. Isn't this the way to run a better railroad?
By Det__Munch

9/18/09 at 7:09 p.m.

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Nevada brought this on itself. Diversify and you won't have thousands and thousands of people unemployed.

afveteran:
I hope no one in your family ever has to worry about surviving in this economy because then you would have to change your narrow-minded attitude. What are people supposed to do if the money just stops? And it does, after 18 months. So that means Vegas will suffer more set backs with more foreclousres and more people leaving the city.
By Phargo

9/18/09 at 7:41 p.m.

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Why should we have to pay the Federal Government back the money they lend us? Isn't that racist?
By LarryVegas

9/18/09 at 8:12 p.m.

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Only if you disagree with their socialist agenda...
By hal0bender

9/18/09 at 8:45 p.m.

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What if no jobs ever come back to any meaningful numbers? This is a very real possibility. Are we going to have a permanent welfare class with no expiration on benefits? How can we afford this?

Truth is, LV Valley needs to de-populate and one way or the other nature will take care of this. There needs to be more people living in the midwest where land, water, and food are more plentiful. This insanity of having a valley of 2 million in the mojave desert is not realistic.

We need to encourage more growth in other parts of the country...not the mojave desert.
By lipton

9/19/09 at 5:40 p.m.

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Neiman, remember this, if you never remember anything else ever, you never get anything free from the government. Come tax time all these unemployed people trying to live on unemployment will get yet another blow, because they have to pay taxes on that unemployment. I hope they all realize that. So here it comes, whatever monies were allocated for unemployment, we pay back with interest, as well as recipients paying income taxes on it. So you tell me who's coming out on top with the bucks. Can you say g-o-v-e-r-n-m-e-n-t?
By CarsonNewshound

9/20/09 at 12:34 a.m.

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Now that the state is burning down, Nevada "leaders" are standing there, watching the walls ignite and fall over. Then it dawns on our "leaders." "Wow, we should have created a fire department. Yeah! That's it, a fire department."

Unfortunately, Nevada cannot be saved from its middle-school mentality. It will suffer. It will hurt. Up to 500,000 Nevadans will leave the state in search of communities where actual adults are running things. Nevada leadership wants to revert to territorial status. They just might get 'er done....
By afveteran

9/22/09 at 8:17 p.m.

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I'm not concerned with individuals losing their benefits. I'm concerned about our political leaders making sound decisions, however harsh they may be, in running the government on a budget, just like a business does it, and a family does it by staying within their means. There is no free lunch out there for people who can work and should work, but the few free lunches out there should be doled out to widows, orphans, and crippled folks.