Batt Backs $110 Million Unemployment Tax Cut Plan Also Would Streamline System To Ease Understanding

Gov. Phil Batt has endorsed an Idaho Department of Labor committee’s recommendations for cutting unemployment taxes about $30 million in 1998 and an additional $80 million in the following three years.

“This is probably one of the most important things that will occur during my four years in office,” Batt said, announcing Monday that he will submit the committee’s proposals to the Legislature in January.

Lawmakers last winter approved the governor’s recommendation for a one-year, $22.8 million reduction in unemployment taxes, as well as some minor increases to benefits.

But the fund’s reserve from taxes paid by Idaho employers has increased to $325 million from less than $100 million in the mid-1980s on the strength of Idaho’s growing economy, so Batt appointed a committee led by Michael White of Hecla Mining Co. to review the law for more possible reductions.

The result is proposals for streamlining and simplifying Idaho’s Employment Security Law to make it more understandable and easier to administer while making only modest changes in benefits that are among the best in the nation.

Batt said the proposed changes also would benefit employers by letting them keep $110 million over four years - money that could go toward business improvements and expansion, and possibly to employee pay raises.

“That’s a heck of a lot of money to put back into Idaho’s economy,” he said.

The recommended changes include:

Reducing rates for employers who pay more in taxes than their employees take out in benefits.

Lowering the rate for new, startup employers by about 30 percent.

Reducing the percentage increase for some employers when they move to the next higher tax bracket.

Besides White, the committee included three legislators and representatives of labor and small and large Idaho businesses.