When you see Gov. Brown crowing about bringing the deficit down to $1.9 billion you need to know the truth.  He conveniently forgets among other items—which add up to $60 billion in deficit—the $10 billion California owes the Feds of loaning us money to continue paying unemployment checks.

Due to the nature of the loan—and NO principal has been paid—last year we paid $323 million in interest from the General Fund budget.  This year the amount is $496 million—next fiscal year it will be closer to $750 million—just in interest payments without a dime paid to lower the principal!

“California employers will pay up to $42 annually in additional unemployment taxes per employee because the state hasn’t repaid a loan from the federal government to shore up the insolvent Unemployment Insurance Trust Fund.

Largely overlooked in the debate over the fiscal cliff, the loan repayment tax could cost California business owners up to $496 million next year.”

See the full story by clicking on the blue headline

 

State tax on employers will jump in new year

Unemployment insurance levy will include federal surcharge

Sacramento Business Journal by Kathy Robertson, 12/28/12

Starting Jan. 1, California employers will pay up to $42 annually in additional unemployment taxes per employee because the state hasn’t repaid a loan from the federal government to shore up the insolvent Unemployment Insurance Trust Fund.

Largely overlooked in the debate over the fiscal cliff, the loan repayment tax could cost California business owners up to $496 million next year.

And the surcharge will grow every year if lawmakers don’t act.

California’s Unemployment Trust Fund ran out of money in January 2009 due to high unemployment during the recession. To keep benefits flowing when employer contributions failed to cover …

 

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