State unemployment tax to remain the same

CARSON CITY -- With Nevada unemployment still highest in the nation, the state Employment Security Division's interim director decided Tuesday to keep the unemployment tax at an average rate of 2 percent in 2012.

That doesn't mean Nevada employers won't escape higher unemployment taxes.

While the state tax remains the same, they will pay an extra $7 per worker in federal unemployment taxes on their income tax returns in April.

The federal government by law is automatically increasing its unemployment tax to start collecting on a loan to Nevada that is expected to reach $861 million by Sept. 30.

Employers now pay $63 per year per employee to the federal government for federal unemployment benefits.

That tax could climb to $238 per employee in 2017 unless the state itself begins cutting down on the debt. The 2 percent tax covers only state unemployment benefits paid in the first 26 weeks after a layoff.

Because of the high unemployment in Nevada for the past four years, the state Employment Security Division has had to borrow money to cover its share.

About 80,000 Nevadans now are receiving weekly unemployment checks, and most of them are receiving extended federal benefits, as well.

Former division Administrator Cindy Jones said in October that she planned to hold the rate constant.

Jones has since taken another state job, and acting Administrator Dennis Perea decided Tuesday to stay the course.

The actual tax rate paid by companies varies from 0.25 percent for companies that seldom have layoffs to 5.4 percent for those that frequently do.

New companies pay a 2.95 percent tax.

Perea noted that it has been the policy to keep tax rates low in bad economic times and increase them when the economy is booming. However, he said, as of Sept. 30 the state owed the federal government $731 million, and the debt is expected to increase to $861 million by Sept. 30.

Counting federal benefits, some laid off workers can receive weekly checks for up to 99 weeks.

Unless Congress extends the program by Dec. 31, unemployed workers could be cut off at 26 weeks of state benefits.

The typical unemployed worker in Nevada receives $300 a week in unemployment benefits, with a maximum of $396 per week.

During a 10-minute Employment Security Commission hearing Tuesday, Brian McAnallen, vice president of government affairs for the Las Vegas Chamber of Commerce, expressed support for keeping the 2 percent rate because "Nevada businesses are struggling to keep their doors open."

But Gardnerville resident Danna Meyer said the Employment Security Division "can't keep kicking the can down the road" and must start paying down its debt.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.