At the request of House Majority Leader Mike Moyle, the House Revenue & Taxation Committee voted unanimously this morning – with no discussion – to introduce legislation to cut state unemployment insurance taxes that are paid by Idaho employers. The change, which would save employers $115 million over the next three years, was proposed last year and widely supported, but it got killed in the cross-fire between the House and Senate over other tax cuts.
“Most of you … will recognize this from last year,” Moyle told the committee. It’s largely the same, but includes some technical changes and an emergency clause to make it take effect retroactively as of Jan. 1.
“Time is of the essence,” Moyle told the tax panel. “The sooner we can get this done, the sooner the employers of the state can know what the divisors are.”
Due to a robust and growing reserve fund, the bill cuts the divisor that determines the base rates for unemployment insurance tax from 1.5 to 1.3.
Rep. Terry Gestrin, R-Donnelly, moved to introduce the bill, and his motion carried on a unanimous voice vote.
State Labor Director Melinda Smyser said afterward, “I was really excited that there were no objections. The point is we’re trying to make it through the Legislature very quickly, because we want to help businesses with the new rates, lowered from 1.5 to 1.3.”
Passage of the bill has no impact on the state general fund, but the Department of Labor will incur $74,820 in additional costs because it will need to re-process and mail out notices. If the bill passes and becomes law by Feb. 28, it would avoid the need to issue credits for payments made during the first quarter of 2018 and allow Idaho employers sufficient time to reprogram their accounting and payroll systems.
The bill’s lead sponsors are listed as Moyle, the Department of Labor, and the governor’s office.