The state unemployment tax situation has caused much concern among those employers hit hardest by the recession. Currently, there are two options being considered to provide relief to those employers. The following two scenarios evolved from stakeholder input over the last few months:
Scenario 23 – For employers in tiers 13 through 20, there would be an approximately 34% reduction in the payments due. This would be accomplished by extending the federal loan payback period. This option would also increase the amounts owned by tiers 1 through12. By extending the loan period, all employers would lose the FUTA credit.
Scenario 27 – For employers in tiers 13 through 20, there would be an approximately 24% reduction in the payments due. This would be accomplished through the issuance of bonds whereby we would pay down the federal loan and add the bond payment back as a surcharge over time to those employers in tiers 13 through 20. All other employers would maintain their current payment schedule.
The Senate favors Scenario 27 and the Governor has threatened to veto Scenario 23.
I will provide more detail as it becomes available.