Unemployment insurance rate in Nevada not likely to change

CARSON CITY — A state panel on Tuesday recommended that the average state unemployment insurance rate for the state’s nearly 70,000 employers be maintained at 1.95 percent next year.

But employers will still see a tax break. Bonds sold to pay unemployment benefits during the recession are now expected to be paid off by the end of this calendar year, six months early. As a result, an additional assessment of 0.63 percent now being levied on employers to pay off the bonds will be eliminated starting Jan. 1.

The Employment Security Council made the recommendation after a review of Nevada’s current employment situation and the health of the unemployment fund. No public comments were received at the meeting.

An initial proposal to lower the state rate to 1.90 percent did not win a majority vote of the council. The second vote for the 1.95 percent rate, the same rate as this year, was unanimous.

Renee Olson, administrator of the state Employment Security Division, said the goal of maintaining the state unemployment tax rate at 1.95 percent is to restore the trust fund to an appropriate level of solvency. The fund is now nearly $1 billion, a significant milestone but still below the target, she said.

With one other small assessment of 0.05 percent for an employee training program, the total average rate for employers would be 2 percent for calendar year 2018 if the recommendation is adopted later this year.

The actual rates paid by employee groups varies based on a risk assessment. There are 18 rate classes ranging from 0.25 percent to 5.4 percent.

Fred Suwe, representing the public on the council, said the importance of paying off the bond cannot be overstated.

Olson agreed, saying Nevada will be debt free with $1 billion in the bank by the end of this year. This puts the state in a good position for the next recession, she said.

As to the potential for a recession, Bill Anderson, chief economist for the Department of Employment, Training and Rehabilitation, said none is being forecasted in his analysis.

The job growth being seen in Nevada at about 3 percent per year is more sustainable than that seen before the recession, he said. The job growth is also more diverse and broad based, which will help the state when the next economic downturn does occur, Anderson said.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter.