Businesses fretting over a major hike in the state unemployment compensation tax can relax. At least, for now.
On their first day of session, lawmakers delayed until 2012 a looming increase that could have resulted in as much as a twelvefold increase in the unemployment tax for businesses. Gov. Charlie Crist immediately signed the bill into law.
If taxes had not been delayed, the minimum unemployment tax businesses would pay per person would have risen from $8.40 to $100.30. Businesses paying the maximum rate per person would have seen a rise from $378 to $459.
Legislators promised quick passage of the delay before session started, and they followed through on that promise with little debate Tuesday. Almost identical versions of the bill were introduced into the House and Senate before session started.
This is going to save jobs and, in some cases,help create jobs, said Sen. Rudy Garcia, R-Hialeah, sponsor of the Senate version of the bill.
The House passed its version of the measure, HB 7033, in its late morning session Tuesday with a vote of 117-0. The Senate passed the House bill in the afternoon at the urging of Garcia.
In addition to freezing the tax hike for two years, the bill freezes the wage base at $7,000 for two years. It also allows employers to pay the tax in quarterly installments. The tax, already on the desks of most businesses, is due in April.
The bill passed without argument, but there were concerns expressed. Some Senators pointed out the bill only addresses some of the states unemployment problems. The state eventually needs to expand and modernize its outmoded system, they said. By modernizing, the state could qualify for as much as $444 million in federal stimulus money.
We have $400 million that belongs to Floridians, said Minority Democrat Whip Anthony Hill. And the only thing stopping us from getting it is modernization.
Chris Karlo, partner in the Tampa-based Mercury New Media company, said that passage of the bill was exceptionally good news. The delay will allow him to concentrate on hiring staff for his small company, which employs about a dozen staff.
Karlo was afraid the states struggling unemployment trust fund would convince legislators to deny the delay. He said he understands taxes need to rise to continue providing services to employers, but they shouldnt rise dramatically given the current economc uncertainties.
Im not a Dont tax me! kind of guy, Karlo said. Im a Dont raise them so rapidly! kind of guy.
Many businesses will still see their tax bills increase due to the states tax rate formula, but they will not increase as much as they would if the hike was not delayed.
Gloria Pugh, owner of Tallahassee-based A Man With A Truck Movers, said the night before session that she supported the delay. But she also said the Agency for Workforce Innovation, which works with the state Unemployment Compensation Trust Fund, should do better at preventing abuses of unemployment benefits and tighten its dispersion of money. This will keep the trust fund full and thus prevent businesses from incurring extra tax expenses, she said.
They need to evaluate the way the agency administrates the fund, she said. The agency is being way too generous.
