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(Carson, City, NV) Governor Jim Gibbons
today announced his recommendation of a
one-year reduction in unemployment insurance
taxes paid by the majority of Nevada
businesses. “The best way to keep jobs and
encourage businesses to add new workers is
make it easier for them,” Governor Gibbons
said, “Nevada businesses have already been
hit by an increase in the payroll tax this
year. Raising the unemployment tax rate may
push some businesses struggling through this
recession over the edge. By temporarily
lowering the unemployment insurance tax,
Nevada will retain existing jobs and
encourage new businesses to relocate to
Nevada, creating new jobs and further
diversifying our economy.”
“Temporarily reducing the average employer
assessment from 1.33% to 1.0% will save
Nevada businesses an estimated $70 million
during calendar year 2010,” Gibbons said, “I
am optimistic that by late 2010 our
unemployment rate will be decreasing, we
will have generated new jobs, and we can
begin repaying borrowed funds to the federal
government. For now, it is prudent to help
Nevada employers weather the recession.”
Unemployment insurance tax rates are set
annually by regulation. The Employment
Security Advisory Council, a nine-member
council appointed by the Governor pursuant
to NRS 612.305, meets October 6 to conduct
the annual public hearing regarding the
unemployment tax rate for the upcoming year,
and to make recommendations to the
Administrator of the Employment Security
Division for the next calendar year rates.
Nevada’s businesses presently pay state
unemployment insurance taxes of between
0.25% and 5.4% on the first $26,600 of
payroll per employee, based upon the
employer’s past claims experience. The
average employer pays 1.33%. New businesses
in Nevada pay 2.95% for up to 4 years, until
they have an experience rating.
Funding for unemployment insurance trust
funds is countercyclical, meaning that fund
balances are built up during a prosperous
economy and utilized during an economic
downturn. Due to excellent management of its
Unemployment Insurance Trust Fund, Nevada
has been able to avoid borrowing federal
government funds to pay unemployment claims
until mid-October, 2009 – despite having the
second highest unemployment rate in the
nation. Twenty-two states are currently
borrowing funds from the federal government
to pay their unemployment claims, and 40
states will be borrowing funds by the end of
2012. |
