State holds steady on unemployment tax rate for businesses
CARSON CITY -- The state Employment Security Council voted unanimously Tuesday to keep the unemployment tax rate paid by employers at 2 percent of employees' wages.
By keeping the same rate in 2012 as in the current year, state government will have to borrow another $130 million from the federal government so that it can keep paying the state portion of unemployment benefits to laid-off workers. Since Nevada already has borrowed $736 million, that would bring its debt to more than $866 million.
And if the state does not increase its own tax rate to start paying that debt, then the federal government automatically will hike the unemployment taxes collected from employers until the Nevada debt is repaid. Now the federal government collects $21 a year from employers for each employee, but it might increase that to $42 per employee in 2012 and higher in subsequent years.
The decision against increasing the employer tax came during a three-hour meeting in which state Economist Bill Anderson said Nevada continues to "bounce along the bottom" with the worst economy and highest unemployment rate in the nation.
Anderson predicted the state's unemployment rate, now 13.4 percent, will average 12.4 percent next year and then 11.3 percent in 2013.
Those rates likely would keep Nevada once again at the nation's bottom as he foresees only a 1 percent, or 10,000-employee increase in annual job growth. Nevada lost 189,000 employees in 2009 and 2010.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.
