Unemployment Taxes Going Up Again

Dec 8, 2010

Washington's Employment Security Department is sending out 2011's tax-rate notices this week to more than 170,000 businesses.

The agency says next year's average rate will increase by nearly a full percentage point.  Most employers' rates are going up for the second year in a row.  It's the highest average rate in more than two decades. 

Business groups say this adds insult to injury.  Amy Brackenbury is with the Building Industry Association of Washington.

"This is terrible news for Washington employers, particularly if they're trying to keep people employed or get people back to work, because that's another cost and it's on top of the double-digit workers compensation tax increases that are going to be landing in employers mailboxes in the next couple of weeks also," she says. 

Unemployment tax rates are set according to a formula in state law.  Brackenbury says that formula wasn't designed to handle the prolonged downturn we've been experiencing. The BIAW is pushing for changes that would spread the burden out over more years.  She says this would help prevent even more layoffs.

In the past year, the state says it paid about $2 billion in unemployment benefits, compared with about $1.2 billion in tax collections.