Jobless tax changes may come quickly

TALLAHASSEE — House Speaker Larry Cretul laid out a plan Thursday for delaying a big increase in the state’s unemployment compensation tax — a move business groups have been demanding saying the boost is sure to spark more job layoffs.

Cretul’s plan, which business organizations claim to have helped craft, would delay most of the looming tax increase for the next two years and reduce penalties and interest payments by employers over those years.

Companies also would be shielded from getting hit with employer assessments until next year on the almost $1 billion in loans the state has already accumulated from the federal government to replenish the collapsed fund that pays unemployment benefits.

In outlining a framework for House committees to work on through February — with an eye toward approving the cut the first week of the March regular session, Cretul included a warning for business organizations.

“Reducing the tax burden this year will result in tax rates and payments in future years that will be higher than they would have been,” said Cretul, R-Ocala. “It will also mean greater borrowing from the federal government to pay benefits, along with increased interest payments required to service that debt.”

The minimum annual rate charged by the state to employers with a strong record of keeping employees would rise from $8.40 per worker to $100.30. The maximum rate, now $378 per employee, is on track to jump to $459 – with an increasing number of Florida businesses falling into this sector because more have been laying-off workers.

Cretul’s proposal would change that minimum rate to $25 per-worker — not as low as it was last year. But that slightly higher rate, which Cretul said business groups called more “manageable,” will also help cover benefits for workers who lost jobs at the 37,000 Florida companies that closed over the past year.

Tax payments are due April 1, Senate President Jeff Atwater, R-North Palm Beach, and Gov. Charlie Crist have endorsed the plan to try to roll back the bills when the session dawns.

“Our timeline is similar in that we share the House’s goal of having a final vote the first week of session,” said Jaryn Emhof, an Atwater spokeswoman.

The trust fund had a $1.3 billion surplus last December but that melted away as Florida’s jobless rate soared to its current 11.8 percent unemployment rate. The tax impact on businesses expanded when the same groups now calling for repeal of the boost supported increasing taxable wages from $7,000 to $8,500 per employee to replenish the trust fund more quickly.

For Florida’s 1.1 million unemployed – the majority of whom studies show are ineligible for unemployment benefits – won’t see any direct benefits from the change, other than possibly increasing the likelihood of finding another job in the state’s fragile economy.

“It will keep money in the economy instead of going into government coffers,” said Randy Miller of the Florida Retail Federation, which is helping spearhead the push for revamping the tax plan.

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