Businesses will get hit this year with the bill for the unemployment benefits paid to out-of-work employees, as hard-pressed states hike taxes on companies to fund those benefits. A recent survey found 35 states expect to collect more unemployment taxes this year than last, with states citing increases ranging from 2.5% to 600%.
"A few states have doubled or more than doubled their tax collection," says Rich Hobbie, executive director of the National Association of State Workforce Agencies (NASWA). In addition to Hawaii, which expects a 600% increase, he cited Nebraska, at 150%, South Dakota (140%), Idaho (115%) and Alabama (90%).
As the U.S. jobless rate hit a 26-year high of 10.2% in 2009, sending millions of workers to file for unemployment benefits, the states' unemployment trust funds took a beating. In fact, 26 states have borrowed from the federal government to pay unemployment benefits; as of Dec. 29, loans totaled $26 billion. And the Department of Labor is predicting that by 2012, 40 states will have borrowed a total of $90 billion.
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