Florida Employers Face A Huge Jump In Unemployment Compensation Taxes

Jeff Harrington continues to provide useful analysis on the Florida Unemployment situation:

Florida employers face a huge jump in unemployment compensation taxes

Unemployment compensation taxes paid by Florida businesses will jump dramatically next year because of the state’s double-digit unemployment.

The minimum tax will jump almost 12-fold, from $8.40 per employee to $100.30 in 2010, state Department of Revenue officials said this morning.

The maximum will go up from $378 per employee to $459. Another factor contributing to the increases is that taxable wages are going up from $7,000 to $8,500 per employee.

Notices of businesses’ individual rates will be distributed in November and December, effective for wages paid on or after Jan. 1.

The increases are needed to replenish the state’s trust fund used to pay unemployment insurance benefits. Under state law, if the fund falls below 4 percent of the total taxable payroll in the most recent fiscal year, it automatically triggers an adjustment in unemployment tax rates.

The fund dropped from more than $1.3 billion at the end of last year to zero in August. Since then, Florida has kept the fund solvent by borrowing more than $600 million through an emergency federal loan program.

Florida’s unemployment rate currently stands at 11 percent, reflecting about 1 million jobless. New figures for October are slated to be released Friday.

Sources: Article by Jeff Harrington, Times Staff Writer of tampabay.com (http://www.tampabay.com/news/business/florida-employers-face-a-huge-jump-in-unemployment-compensation-taxes/1052594)

Here is what Jeff Harrington had to say regarding the recent news that Florida will be one of 21 states needed federal government lending due to high unemployment:

Rising unemployment forces Florida, 21 other states to borrow money from federal government

Rising unemployment has now forced 22 states, including Florida, to borrow money from the federal government to keep paying unemployment insurance benefits, and another 10 states are expected to follow suit soon.

That’s the conclusion of a new analysis this week by ProPublica.

Among the dozen states that have been forced to tap into at least a half-billion apiece to stay afloat, Florida stands out.

No, it hasn’t borrowed the most money. That would be California at a whopping $4.6 billion. But none of the other big borrowers are paying out less money to beneficiaries. Florida’s average weekly benefit amount is $239.70. By comparison, 30 states in the country pay out more than $300 a week in benefits, led by Massachusetts at $427.20 a week.

For a closer look, go to http://tinyurl.com/p9o7ay.

Will this help Florida’s unemployment problems?

Sources: Article by Jeff Harrington, Times Staff Writer of tampabay.com (http://www.tampabay.com/news/business/rising-unemployment-forces-florida-21-other-states-to-borrow-money-from/1047348)


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