January 26, 2011 in City

Clock ticks on business break

Rate increases start after Feb. 8 deadline
By The Spokesman-Review
 

OLYMPIA – If the Legislature wants to give businesses a break by cutting unemployment insurance taxes, it needs to do it in the next two weeks, Gov. Chris Gregoire said Tuesday.

At a news conference, Gregoire repeated a call for legislators to pass a bill that would keep unemployment insurance rate hikes for businesses from taking effect. The House and the Senate are each considering a bill that would do that, but one or the other needs to pass and be signed into law by Feb. 8, or current state law will force the rates up, by as much as 50 percent for some companies.

“The rate hike is going to take a bite out of our recovery,” she said.

The proposals would lower unemployment insurance taxes to some 80,000 small businesses and reduce the tax bite by a total of about $300 million this year, Gregoire said.

Bills to reduce the tax rate have bipartisan backing, and blocking the rate hike has the support of business groups, organized labor and progressive groups. But other changes to the unemployment benefits system are causing a split.

Last week, House Democrats amended their bill on unemployment insurance changes so that instead of spending more money on worker retraining as Gregoire wants, the state would provide an extra $15 a week for each dependent of an unemployed worker, up to $50 a week. That switch has the support of progressive organizations and unions, but is opposed by business groups like the National Federation of Independent Business.

Gregoire said the Legislature should move quickly to block the rate hike and take up other changes to the system later. “We can have that debate another day,” she said.

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