Texas Unemployment Taxes Will Go Up

As completely predicted:

Most Texas businesses next year will pay nearly triple the unemployment-benefits tax that they paid this year, the Texas Workforce Commission announced today.

The minimum tax rate owed per worker will be nearly $65 in 2010, up from about $23 this year.

Two-thirds of Texas employers, or about 255,000, will pay the minimum rate next year. This year, 278,000 – or 74 percent – paid the lowest rate.

“More of them will have an ‘experience rating’ because more of them have had layoffs over the past year” and no longer qualify to pay the minimum rate, commission spokeswoman Ann Hatchitt explained.

The rates are the highest this decade and appear to be the heaviest unemployment taxes assessed by the state since the oil and real estate bust of the late 1980s, according to commission records.

Because of the recession, the commission needs to raise or borrow $4.3 billion next year to pay for newly laid-off workers’ first 26 weeks of unemployment benefits and to replenish the state’s unemployment insurance trust fund.

[...]

critics have noted that Texas ranks near the bottom of states in the percentage of laid-off workers who receive help – about 34 percent last spring, according to federal statistics.

The critics also say the tax hit on employers is heavier because Gov. Rick Perry rejected federal stimulus money for unemployment benefits. The Republican governor said there were too many strings attached.

Texas could have avoided levying more than one-fifth of next year’s taxes if it had accepted $556 million of stimulus money. That’s true even if federally required liberalization of eligibility rules immediately were to add $90 million of new benefits costs, which some experts say wouldn’t have happened for many months.

Let’s lay out the sordid tale of Perry and the unemployment fund in Texas. Last year, when the unemployment trust fund had a surplus, he called for tax cuts even though the Comptroller was predicting a $9.1 billion drop in revenue for the state. When stimulus funds were being handed out earlier this year, Perry made a big noise about refusing government “bailout” money…until he relented and decided to accept it after all. But not all of it. He still refused to accept funds allocated for unemployed Texans. And as a result, unemployment taxes will triple to cover a projected $4.3 billion shortfall. Why go to all this trouble? It’s simple: Perry is counting on the stupidity of Texas Republican voters. He cuts taxes because he knows that Republican voters love a good tax cut, and won’t be bothered to pay attention to hard numbers about state deficits. He grandstands about the stimulus because he knows that Texas Republicans hate Obama and the “bailouts”, but after making noise he decides to go ahead and take most of the money after all because even Perry can see how desperate Texas is for the money. But to soften that blow he refuses extra funds for unemployment, citing “strings” that come attached to the money, because he knows that Texas Republicans can’t stand the idea of taking money from Obama, nor can they stand the idea of some bum getting a check because he doesn’t want to work. And now it’s revealed that Texas Workforce Commission will have to raise taxes and borrow money to cover what stingy unemployment Texas allows. And do you know who Texas employers blame when they see their unemployment taxes go up next year? Obama, and “tax and spend” liberals. How does he get away with this? Because Perry’s “defiance” of Obama gets NY Times attention, and the result gets a story in the Dallas Morning News.

Perry counts on Texas Republicans being too stupid and having too short of an attention span to notice the completely natural and predicted results of his policies, and they are more than happy to oblige.

4 Comments

  1. Texas Unemployment Taxes Will Go Up | http://bit.ly/6l64nc

  2. Frank Cook says:

    Texas Unemployment Taxes Will Go Up | http://bit.ly/8YZ1zY

  3. Crystal says:

    Still is a lower rate than most other states. And lower unemployment. The problem was caused by the Federal Governments meddling in private business to begin with.

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