AGC Blasts Legislative About-Face on Unemployment Insurance Taxes

Last week the House Commerce and Labor Committee reneged on a bill to reform unemployment insurance taxes and instead passed out a bill that will raise taxes on business. This is an about-face as the Senate recently passed a bill that would lower taxes for most employers. The Committee took that bill (SB 5963) and amended it so that it will end up increasing not decreasing taxes on employers.

After having previously supported the bill AGC now OPPOSES it and requests that members contact their legislators via the Grassroots Action Network here.

AGC agreed with the Legislature when it passed a bill that increases benefits for workers with state and federal stimulus money. It was expected that the Legislature would then pass a bill that reduces most employers tax rates an appropriate move given that the trust fund has an extraordinarily large surplus.

Instead the Commerce and Labor Committee voted to increase unemployment benefits yet again. Although the lower tax rates remain in the bill employer tax payments will still go up as they pay more to cover the cost of increased benefits.

The Committee appears to give a break to employers with one hand but takes it away - and them some - with the other said AGCs Government Affairs Manager Christine Swanson. At a time when employers particularly construction firms are struggling to keep their doors open and workers employed the Legislature appears ready to add to their burden by passing a bill that will increase unemployment insurance taxes.

In addition the Committee stripped the bill of language that would have resolved the voluntary quits issue. AGC believes that those who voluntarily quit due to domestic violence the transfer of a military spouse or other bona fide reasons should be able to receive benefits.

The Senate-passed bill would have provided clarity on the voluntary quits issue but unfortunately the House Committee amended the bill to give Employment Security staff the discretion to make unilateral decisions regarding when its appropriate to quit and still receive unemployment benefits.

The vote in Committee was along party lines with all Democrats supporting it and all Republicans opposing. Those who voted in favor of the revised bill (and against AGCs position) were Representatives Conway (chairman) Wood Green Moeller and Williams. Those who opposed it were Representatives Condotta Chandler and Crouse.

For more information on this legislation contact Christine Swanson at 360-352-5000.