Some Nevada employers confused by one-time assessment to repay feds

By Cy Ryan

Thursday, June 27, 2013 | 3:02 p.m.

State legislators are fielding questions from unhappy or misinformed businesses who are about to get hit with an increased assessment on their unemployment tax.

“There’s a lot of misinformation” on the issue, said Sen. Debbie Smith, D-Sparks, the chairwoman of the Legislative Interim Finance Committee.

The state Employment Security Division will send out notices next week that employers will have until July 31 to pay the assessment, which will be a maximum of $25 per worker.

The money will be used to pay the $17 million in interest on the $573 million the state owes the federal government for a loan made to pay jobless benefits during the recession.

Assembly Minority Leader Pat Hickey, R-Reno, said legislators didn’t realize this would come up so fast. He said the $25 a head was a “significant hit” on employers with large payrolls.

But Smith said employers knew this was coming.

Sen. Pete Goicoechea, R-Eureka, said he has received a lot of calls about the tax increase.

Legislators discussed the issue Thursday at a meeting of the Interim Finance Committee.

Renee Olson, administrator of the division, said it held various meetings with employer groups during the 2013 session of the Legislature to let employers know about the assessment. And notices were sent out several weeks ago.

An agency official said the division received one call from a business complaining it would get hit with a $20,000 increase. But the employer was informed his one-time assessment would be around $150.

As an example, the division said a business with a $10 million payroll would pay $5,046 in the one-time assessment. And an assessment could be as low as $1.

Hickey asked if there was any leeway to permit the payment to be spread out. But Olson told him there was no flexibility in the law.

The division must pay the interest to the federal government by Sept. 30.

Still in the works is the plan to issue bonds to pay off the full debt at a lower interest rate than the 2.4 percent being charged by the federal government.