Last week the National Association of State Workforce Agencies released the results of a survey relating to UI taxes. Following are some of the conclusions:
- 35 of the 51 state programs expect UI tax payments to increase in 2010. The median increase is 27.5%.
- A total of 24 states will increase their taxable wage base in 2010.
- 28 of the 51 state programs surveyed indicated that the tax rate schedule in their state will increase for 2010. Of the 23 states that do not expect a higher rate schedule, 10 are already at the highest tier allowed by current law.
- The states with the highest projected tax increases are as follows:
Hawaii 600% increase
Nebraska 150% increase
South Dakota 140% increase
Idaho 115% increase
New Hampshire 106% increase
Kansas 100% increase
Alabama 90% increase
Virginia 78% increase
Maryland 75% increase
Montana 71% increase
The survey results are not good news, but also not unexpected. It is interesting that many states with the highest rates of unemployment in 2009 and the largest federal loans do not make the top ten list for tax increases. This does not bode well for 2011, for employers in such states as California, Michigan, Illinois, Indiana, Ohio, North Carolina, and New York. The mechanism for funding the cost of unemployment compensation in these states is not reacting quickly, but there will have to be a solution down the road. This reinforces our conviction that the increases in state UI tax are a multi-year phenomenon.
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