By Gina Jordan
http://stream.publicbroadcasting.net/production/mp3/wfsu/local-wfsu-884065.mp3
Tallahassee, FL – The clock is ticking on the unemployment compensation tax. The legislature has less than two months to make a decision about whether to delay a massive tax increase for employers. If lawmakers don't step in, more people may soon be out of work.
Larry Barineau owns a heating and air conditioning business in Tallahassee. He acknowledges the need for an unemployment system, but calls it a doubled-edged sword.
"The argument is that they're putting the whole bill on us, the small business community, when we're already crippled. These little things are what's going to put the small family business out of business. We're just asking to relook at this thing, see if there's a better way to do it, so we can all survive."
In pre-session meetings, the Economic Development and Community Affairs Policy Council has already taken up draft legislation that would temporarily ward off the hefty bill for Florida's employers. Council Chair Dave Murzin says the proposal would bring relief for this year and next year, while extending benefits to the unemployed.
"It's important to understand, however, that reducing the tax burden in the short term will result in tax rates and payments in future years that will be higher than they would have been otherwise. It will also mean greater borrowing from the federal government to pay benefits, along with increased interest payments on the outstanding federal advances."
Since last summer, when Florida's unemployment trust fund was depleted, the state has been borrowing hundreds of millions of dollars from the federal government to pay jobless benefits. The zero balance also triggered a dramatic tax hike for 2010 that pushed the minimum amount paid per worker from $8.40 to $100.30. Some businesses will have to pay as much as $459 per employee, if lawmakers do nothing.
Representative Jennifer Carroll presented the draft bill to the council, and answered concerns that if lawmakers step in to halt the tax increase, they may actually be delaying an economic recovery.
"This bill was in conjunction with the approval of and recommendations from the business community. They understand across the nation that this issue is occurring because the unemployment compensation rate is spread across all existing businesses. If we don't do anything, the cost will be higher to the employers at this juncture."
When members of the public had a chance to address the council, Rich Templin was first in line. He's a labor union lobbyist with the AFL-CIO. He said Florida's antiquated unemployment system may be partly to blame.
"So what I ask of you today is, as we are considering this fix, we ask you to please consider modernizing this 70-year-old system."
The Florida Chamber of Commerce, seeing trouble ahead, has been working on a solution for more than a year. Chamber Vice President David Daniel told the council they were shocked by the magnitude of the increase.
"We have in this 2010 calendar year a $1.2-billion tax increase that is going to be placed on the backs of Florida employers The goal of this legislation is to mitigate that, not to eliminate it. The only way to eliminate it, frankly, is to get Floridians working again."
Daniel agreed with the union lobby that the state's 70-year-old unemployment system was never designed to handle a jobless rate hovering near twelve-percent. He was asked if he thinks that making more people eligible for compensation would mean more money for the chamber's business members.
"I'd rather focus on economic recovery for Florida's business community so we can hire these people, rather than pay the unemployment comp trust fund to pay these people a small stipend to spend money in my stores."
The Florida Retail Federation is among those hoping for a two year delay in the tax hike. Executive Vice President Randy Miller says the increase will lead to more jobs lost.
"We know, and you have to understand, this is employer money. One of our employers said, I have a fixed amount for payroll cost. If my unemployment comp tax goes up, I still have the same amount of money. I am going to lay more people off.'"
House Speaker Larry Cretul hopes to have a measure delaying the tax increase approved by the first week of session in early March.