LANSING – Businesses that have numerous or long-term layoffs will pay more in unemployment taxes next year and all businesses will pay more in 2010 to help the state handle the high rates of unemployment.
The state has been borrowing to cover unemployment benefits since 2006, but in recent months has converted those loans from a running tab to a growing balance, said Unemployment Insurance Agency spokesperson Norm Isotalo.
“It reached a point where we haven’t been able to repay all the loans we’ve taken out,” Isotalo said. The state currently owes the federal unemployment system some $376 million.
The first to be hit by the growing debt will be the “negative balance employers”, those whose laid-off workers have collected more in benefits than the companies have paid into the system.
“These negative balance employers will see a solvency tax go into effect in 2009,” Isotalo said. “That will be used to repay interest on federal loans.”
Unemployment taxes for those companies, about 34,000, will increase $67.50 per employee.
Unless there is a substantial increase in employment in the state over the next year, Isotalo said all businesses will begin paying a $21 federal unemployment tax increase beginning January 1, 2010, to pay down the principal on the loans.
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