Businesses to see little change in unemployment insurance tax

CARSON CITY — Nevada employers will see little change next year in what they pay in unemployment insurance taxes under a regulation given a final hearing on Tuesday.

The average rate, which is adjusted annually, will dip to 1.95 percent in 2016 from 2 percent currently.

But combined with a separate levy imposed to finance bonds issued to pay off a loan to the federal government when Nevada’s unemployment trust fund ran dry during the recession, the overall rate will be 2.62 percent on average, up from 2.61 percent.

Additionally, wages on which unemployment taxes are imposed will increase to $28,200, up from $27,800.

Given all that, the average cost per employee for all unemployment insurance contributions will rise to $738.84 next year, up from $725.58.

Renee Olson, administrator of the state Employment Security Division, was expected to sign the regulation today, officials said.

An overview on the effects of the regulation issued by the division said under the new rates, the balance in Nevada’s Unemployment Trust Fund is expected to grow to $585 million from $409 million, and earn $13.6 million in interest from the U.S. Treasury.

The state trust fund is used to pay jobless benefits to workers when they are laid off. During the boom, Nevada had more than $800 million in reserves, but that was quickly depleted in the Great Recession when tens of thousands of people lost their jobs and the state unemployment rate hit nearly 14 percent.

Nevada, like many other states, borrowed money from the federal government to meet jobless benefit obligations. But the state later issued bonds to pay off the federal government, reducing financing costs and interest.