Taxes to go up for state businesses next year

Unemployment spike cause of increase, according to chamber of commerce

TALLAHASSEE — Spurred by the spike in unemployment caused by the coronavirus pandemic, unemploymenttaxespaidby businesses will increasenext year, according to the FloridaChamber ofCommerce.

The annual rate adjustment is typically announced by the Department of Revenue, but the chamber, one of the state’s largest business lobbies, sent a release to the media about the changeWednesday. Aspokesperson for the Department of Revenue did not return a call or email.

Starting in January, businesses paying the minimum rate will owe $20.30 per employee, a $13.30 increase on the current rate. The maximum rate, usually paid by large businesses with a more frequent historyof layoffs, remainsat 5.4% of thefirst $7,000 inwages, or $378 per employee.

The change is based on a complicated formula involving the state’s unemployment trust fund balance and the annual payroll in the state. Each employer has its own rate based on its history of layoffs. If a business lays off someone who collects unemployment, the rate goes up, but those with a three-year history of no layoffs have a lower rate.

Thatmeansmost Florida businesses don’t pay the maximum rate and will be affected by the rate change.

“The taxes are going to increase for all employers other than those that are at the maximum,” said Carolyn Johnson, director of policy for business, economic development and innovation policy at the chamber.

Johnson said it was too soon to tell how businesses would be affected by the change, or if it would hinder rehiring as the state recovers fromthe pandemic.

Amid the depths of the Great Recession, unemployment taxes were set to increase from $8.40 per employee to $130 per employee in 2009. The chamber and other business lobbies urged lawmakers to stretch out thepayments, lowering the increaseand extending the amount of time to replenish the trust fund.

Florida needed a $2.3 billion loan from the federal government to pay unemployment benefits during the Great Recession but it had built up a $4 billion cushion in its unemployment trust fund at the start of the pandemic. That has dwindled down to $1.3 billion as of Sept. 30, even as 20 other states have required federal loans to help their systems cope with the pandemic-induced jobless claims.

The fundwas able to growbecause Florida pays out a maximum of only $275 per week in benefits, the fifth-lowest among states, and getting benefits is difficult. It also took hundreds of thousands of Floridians weeks and months to even get benefits when the pandemic began because CONNECT, the state’s payment system, was so overwhelmed with claims inMarch and April.

Federal CARES Act money helped add $600aweek to those payments through the end of July, and other federal money has helped jobless Floridians as well, but that money will run out at the end of the year