Jobless rate drains unemployment insurance

Businesses may face higher unemployment insurance taxes in 2009.

BY BILL ROBERTS - broberts@idahostatesman.com

Published: 10/25/08


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Idaho businesses likely will face a double-digit increase in unemployment insurance taxes next year to replenish a depleted insurance fund as the state's economy sags.

The Unemployment Insurance Trust Fund distributed $152.2 million to unemployed workers through September, up about $60 million - or 63 percent - from the first nine months of 2007, according to the Idaho Department of Labor.

Without a tax increase, the fund - which has $247 million - could go broke by 2010, department officials predict.

The tax rate dropped by more than half over the two previous years as the state's economy boomed.

The fund pays money to people who lose their jobs. Jobless workers will get a maximum of $362 a week in 2009.

Unemployment in Idaho has risen from 2.8 percent in January to 5 percent, which means about 17,000 more people don't have jobs.

The exact size of the tax increase to employers likely will be decided by November.

The Idaho Association of Commerce and Industry, which helped create the formula for taxing business to pay into the fund, said the system is fair and workable. "The formula is working as it is designed to work," said Alex LaBeau, the association's president.

The system "provides lower taxes to businesses and higher benefits to workers during good times and has both share the burden of supporting the system during downturns like the one we are experiencing now," said Roger Madsen, Labor Department director.

The unemployment fund is paid for completely by businesses. The tax can range from just over a quarter of a percent to 5.4 percent of each employee's salary, up to $32,200. The rates businesses pay are based on how much they use the fund, department spokesman Bob Fick said.

Bill Roberts: 377-6408

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