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Unemployment tax rates to drop, workers comp rates steady

Gregoire at press conference: Show me some real reforms.

OLYMPIA — Most Washington businesses will see lower unemployment taxes and many will have no increase in their workers compensation rates in 2012.

Gov. Chris Gregoire, announcing the new rates for next year, said they represent “real reform” through work with the Legislature earlier this year, rather than the calls for reform some legislators now say are needed before the state considers a tax increase.

“I've been doing reform long before anybody used it as a political football like they are today,” Gregoire said. “No one has come to me with any new ideas that will solve a $2 billion problem.”

The state's General Fund budget has a gap of about $1.4 billion between spending that  has been planned for state programs and salaries, and revenue the state is projected to collect through June 30, 2013. Gregoire has proposed nearly $2 billion in cuts to close that gap and provide reserves to start the next biennium.

Under the unemployment insurance and workers comp rates announced this morning:

  —88 percent of businesses will pay lower unemployment tax rates, and those reductions will be available even for some companies that have laid off workers in the last four years. About 11 percent will pay higher rates because of the level of  benefits paid to former employees.

  —Unemployment taxes will drop in all 40 rate classes. The rate 1 class, which covers some of the state's smallest businesses, will drop by 71 percent. The total amount of unemployment taxes that will be collected by the state in 2012 will drop an estimated $200 million.

  —There will be no general rate increase for workers compensation, for the first time since 2007. Some individual employers will see their rates go up, depending on their claims history or their industry. Of the state's 317 risk classes for jobs and industries, 171 risk classes will go up and 146 will go down or stay the same.

Those rates are a result of comprehensive reform of the workers' comp system the Legislature passed earlier this year. State officials said it would save about $1.1 billion over four years.

Spec Sess Day 4: Workers comp, unemployment rates, budgets

OLYMPIA — The new rates for unemployment insurance and workers compensation taxes will be announced this morning in a press conference by Gov. Chris Gregoire.

The gov has been touting reforms earlier this year to both systems as proof that her administration and the Legislature are serious about government reform. The proof in this case may be in how much, or whether, the rates change.

In the Legislature, both the House and Senate Ways and Means committees have budget hearings this afternoon. So do both chambers' Transportation committees.

Floor action? Likely none in the Senate, which is scheduled only for a pro forma session at noon. Possibility of something in the House, which convened at 10 a.m. and went into caucus. Prospects for a proposed bailout of the Wenatchee Public Facilities District, however, have to be rated as dismal to non-existant at the start of the day. Today is the deadline, and neither chamber has moved a bill.

Gregoire signs Unemployment Insurance changes

Changes to the state’s unemployment insurance system that will stop tax increases for businesses and temporarily increase benefits for jobless workers were signed Friday as the first completed legislation of this session.
With all sides applauding each other for bipartisan and bicameral cooperation, Gov. Chris Gregoire signed one bill that will stop a scheduled tax rate increase that would have cost businesses an estimated $300 million this year. That bill got its final approval in the House of Representatives Wednesday, in time to notify businesses of the lower rates that effect payments they will make in April.
Another bill passed the Senate Friday morning that permanently readjusts rates and temporarily provides an extra $25 a week in unemployment benefits to those out of work. It also increases training programs available for unemployed workers to help move them into jobs that have more likelihood of continuing in a changing economy…


To read more, go inside the blog

WA Lege Day 30: House passes unemployment insurance changes

OLYMPIA — After some serious negotiating and head-counts on different options, the House unanimously passed a new version of changes to the unemployment insurance system.

It provides businesses with rate relief, cancelling a planned increase in taxes. It's not really a tax cut, Republican leaders were quick to note after the proposal passed, because it merely uses some of the surplus the system has built up over the years. They like to call it a rate smoothing.

In any case, it would save businesses about $300 million in lower rates.

A separate bill allows for a temporary increase in benefits to unemployed workers, using up to $68 million of federal money being made available to the state. It sets aside another $30 million for new training programs for unemployed workers.

The bill with the one-year rate smoothing now goes to the governor. The other changes go back to the Senate, which could vote on that bill by the end of the week.

Washington Senate takes up unemployment tax reduction

Washington businesses would get a break on this year’s unemployment taxes under a bill headed for a floor vote in the state Senate. It’s projected to save Washington employers about $300 million by halting a planned increase in unemployment insurance rates, the Associated Press reports.

The bill’s a priority for Democratic Gov. Chris Gregoire. She says it has to pass both chambers of the Legislature and be signed into law by Feb. 8 to have an effect on this year’s unemployment tax rates.

Lawmakers also have other issues to consider in the area of unemployment policy, but those topics have been split from the tax-relief bill and will be debated separately. Labor groups have advocated for a new $15-per-child payment for jobless families, but businesses are wary of adding more benefits.

Wa Lege Day 23: Unemployment Insurance vote delayed

OLYMPIA — Senate Democrats had to delay a vote on a plan to save businesses from paying millions more in higher unemployment insurance taxes after Republicans said the plan didn't to help the workers who have been off the job so long they are running out of benefits.

Yes. You read that right. Democrats wanted to cut taxes for businesses and Republicans blocked it because it didn't do enough for benefits for unemployed. Although that seems like a Bizarro World scenario from DC Comics, it was really a bit of political maneuvering as the Legislature tries to “beat the clock” on changes to Unemployment Insurance.

The House recently passed a bill that cancels a scheduled increase businesses are facing this year for unemployment taxes and uses some new federal money to add $15 per week per dependent for jobless workers with families. Gov. Chris Gregoire has called for the Legislature to block the rate hike but wants the federal money to be used to expand training programs for unemployed workers, to move them into jobs that have a better chance of keeping them employed in the coming years.

But some social action groups and organized labor back the boost in payments for benefits, so Democrats are understandably verklempt and still debating that section.  That creates a problem because the rate hike has to be cancelled by a law that is passed and signed by Feb. 8, or it goes into effect for the entire year.

 This morning Senate Democrats tried to de-couple the two parts of the bill, with an amendment that cancelled the rate hike but took out the benefits provisions, leaving them to be handled later in the session. That meant a portion of the benefits section which extended unemployment insurance was also removed.

Before they could debate the amendment, however, Sen. Mark Schoesler, R-Ritzville, used a parliamentary maneuver to try to block it. “Without this change in law, 70,000 workers will exhaust their unemployment benefits,” he said.

Senate Majority Leader Lisa Brown, D-Spokane, objected, saying there's time to extend the unemployment benefits but the rate hike  needs to be stopped sooner: “The clock is ticking for thousands of businesses in Washington state. Their taxes will go up…We should not be playing politics with cutting unemployment insurance rates to business.”

After Schoesler's motion to block the amendment passed 26-21, a bit more parliamentary maneuvering ensued. Sen. Tracey Eide, D-Des Moines, moved to defer further consideration. Schoesler moved to act immediately on the original bill. Eide moved to adjourn for the day. Sen. Janea Holmquist Newbry, D-Moses Lake, objected. Lt. Gov. Brad Owen, presiding over the Senate, said there's no debating a motion to adjourn. Schoesler called for a roll call vote on Eide's motion to adjourn. (Motions to adjourn are usually done by voice vote with some of the senators on their way out of the chamber.)

Motion to adjourn passed 25-22. They'll be back tomorrow, when presumably they will try again.

WA Lege Day 16: Gregoire wants UI bill soon

OLYMPIA — Gov. Chris Gregoire urged legislators to move quickly on proposals to cancel planned increases in unemployment insurance taxes, saying she needs a bill in two weeks.

At a press conference this morning, Gregoire repeated a call for legislators to keep rate hikes that businesses face from taking effect. Two bills introduced at her request, one in the House and one in the Senate, would accomplish that, but only if one passes and is signed by Feb. 8. After that date, current state law requires the rates to go 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 for some 80,000 small businesses, and reduce the tax bite by a total of about $300 million this year, Gregoire said.

The Legislature should wait on another issue surrounding unemployment insurance, which involves changing benefits for laid-off workers to qualilfy for some $98 million in federal funds, she argued. Gregoire has proposed using the money to expand training benefits for the unemployed so they can study new occupations. The State Labor Council wants the money to be  used to increase payments to unemployed workers with dependents, providing them with an extra $15 per week per child, up to a maximum of $50 per week.

“We can have that debate another day,” she said.

Unemployment, workers’ comp proposals ambitious

Gov. Chris Gregoire has ambitious reforms planned for Washington's unemployment insurance and workers' compensation programs. Bert Caldwell parses some of the devilish details in his Sunday column.

Record year for unemployment claims

Unemployment claims in Washington set new records this year, with more than 500,000 jobless workers collecting almost $4.7 billion in benefits.

The Employment Security Department this morning compared the results with 2009, when 475,000 claimants collected $4 billion in benefits, and 2008, when 290,000 collected $1.2 billion.

The federal government, which recently extended long-term benefits, paid 58 percent of the 2010 claims.

Unemployed workers drew benefits for an average 41 weeks, up from 28 weeks in 2009.

 

Unemployment insurance rates to rise in 2011

Washington’s unemployment insurance tax rate will increase to an average 3.26 percent next year because jobless workers received a record $2 billion in benefits, the Employment Security Department said today.

The unemployment trust fund collected only $1.2 billion during the year, but retained a $2.5 billion balance in the trust fund as of Nov. 30, the department said.

The 2011 rate will be the highest since 1988. The 2009 rate was the lowest in 40 years, but increased to an average 2.39 percent this year as unemployment rates climbed to near double-digit levels.

The state’s 170,000 employers will pay rates ranging from 1.33 percent to six percent on the first $37,000 in worker earnings. Employers delinquent on past payments, or too new to have established a claims history will pay as much as 8.64 percent.

 

 

 

Idaho borrowing from feds to bail out unemployment insurance trust fund

Idaho has borrowed more than $51 million from the federal government since July 1 to bail out its unemployment insurance trust fund, despite a 70 percent tax rate increase for Idaho employers this year. It gets worse: The state expects the borrowing to rise to $190 million by next spring - even with a much larger tax increase likely to hit next year. “The rate will go up in 2010 and it will go up more than it did this year,” said Bob Fick, spokesman for the Idaho Department of Labor.

For much of the past decade, business interests pushed to freeze tax rates when they would otherwise have gone up, pushing off a reckoning. But that’s not likely this year. “We kinda knew we were in a situation where, given the severity of this downturn, and particularly the severity for Idaho, things really weren’t going to be looking good for this fund,” said Alex LaBeau, president of the Idaho Association of Commerce and Industry. “It’s not on our list as something that we are going to push for legislative amendments.”

You can read my full story here. With soaring unemployment, Idaho expects to pay out $550 million in federal and state unemployment benefits this year - the highest it ever paid before was $247 million in 2008. “We’re talking about doubling it in one year’s time,” Fick said. “This is a severe circumstance.”

State’s biggest business group to lawmakers: Step away from the $4 billion unemployment trust fund…

As lawmakers plan to tap the state’s $4 billion unemployment insurance trust fund, the state’s biggest business group is trying to stop the train.

In a letter to Gov. Chris Gregoire recently, Association of Washington Business President Don Brunell said nobody knows how bad unemployment is going to get, and that tapping the money for things other than unemployment checks “is a risk not worth taking.”

Democratic legislative leaders say the fund is the healthiest in the nation. They’ve said they’d like to dip into it to boost benefits, perhaps $45 a week. That would cost about $200 million over the next two years. AWB objects to this, spokeswoman Jocelyn McCabe said, for fear of draining the fund faster than it should be in tough times.

Lawmakers have also floated the idea of using another $200 million from the fund to pay for a new tax break for businesses, or of using some of the money for job training. AWB thinks that, too, is a bad idea.

According to Brunell, Washington businesses pay the second-highest unemployment rates in America: $637 per worker, compared to a national average of $281. He also points to California, which is trying to borrow money to replenish its dwindling unemployment coffers.

“Other states are in similarly dire circumstances,” Brunell wrote. “We do not want to join them.”