Las Vegas Sun

October 2, 2023

State weighs business tax hike for jobless fund

CARSON CITY – Assembly Speaker Barbara Buckley says she doesn’t think this is the time to boost the rates charged to businesses to finance the near bankrupt unemployment trust fund.

After a meeting with Gov. Jim Gibbons and other legislative leaders, Buckley, D-Las Vegas, said she doesn't favor “raising rates when times are tough.”

An estimated 60,000 employers pay into the fund to finance jobless benefits to the unemployed. The fund will be out of money in October.

The advisory council of the unemployment trust fund meets Oct. 6 to make a recommendation whether to boost the rates.

Robin Reedy, chief of staff for the governor, said she wouldn't be making any recommendation to the council.

Buckley said the unemployment trust fund is to be depleted three months earlier than expected. She said any rate increase should be delayed until economic times are better and then a surplus should be built up to meet the downturns.

Gibbons and Cynthia Jones, administrator of the state Employment Security Division, have asked the federal Labor Department for a loan of an estimated $280 million to carry the state through the rest of the year.

Gibbons is asking that the loan be made interest free. A number of other states have already asked the federal government for loans to help cover the checks to the unemployed.

Senate Minority Leader Bill Raggio, R-Reno, did not have any recommendation on the rates charged to the 60,000 employers. But he said there may be some necessity to have the rate increased.

Employers must pay a tax rate ranging from 0.25 percent to 5.40 percent on the first $26,600 in wages. The rate is based on the employee turnover in the business.

The average rate now is 1.3 percent with the payment at $353 per year per employee.

Employers starting a new business must pay unemployment insurance tax at a rate of 2.95 percent. After a period of 14 to 17 calendar quarters, the business is eligible for an “experience” rating, which means the rate could go lower if the employee turnover is kept down.

A spokeswoman for the employment security division says it will make its recommendation public at the meeting next month.

The statewide unemployment rate in July was 12.5 percent, the third highest in the nation. There were an estimated 179,300 out of work.

The jobless rate for August will be released this Friday.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy