Hawaii jobless fund may require tax hike (taxes for businesses could jump from $90 to $1,070)

[Omaha Steve]

http://www.honoluluadvertiser.com/article/20091129/NEWS01/911290387/Hawaii+jobless+fund+may+require+tax+hike

Unemployment insurance taxes for businesses could jump from $90 to $1,070

By Greg Wiles
Advertiser Staff Writer

The state is looking for ways to dull a staggering jump in unemployment insurance taxes that is forecast to occur as the jobless benefit fund runs out of money.

The state Department of Labor and Industrial Relations is reviewing a variety of options and seeking input from businesses on various scenarios. If nothing is done, the average taxes employers pay will soar almost 12-fold, from $90 annually this year to $1,070 in 2010.

As it stands, the state forecasts the fund will run out of cash by the end of next year. forcing it to borrow at least $55 million from the federal government.

The state wants to blunt the increase, fearing the jump in employer costs may lead some to cut worker hours, lay off employees or close their doors altogether. There's also a concern that chopping unemployment payments could lead to worse economic problems.

Alternatives range from tinkering with the technical aspects of the tax to more federal borrowing and limiting benefits.

"The question is what would be reasonable in moderating that increase," said Darwin Ching, the Lingle administration's point man on the issue.

"We don't want to drive businesses into insolvency."

FULL story at link.

[Cha]

1. Good luck Hawai'i ..maybe

next year if Rep Neil Abercrombie is voted in and the repuke gov linda lingle leaves..Hawai'i can actually get somewhere.

[notesdev]

2. What's with this strange new idea

that people and businesses in a crumbling economy can afford more taxes? Adding people to the unemployment rolls is not going to help anyone.

I have a lot of trouble believing that a state government can find nothing in its budget to cut. I can't find much in the way of Hawaii-specific budget information, but if they are anything like most states, they would have a crushing pension problem eating up their money.

This country needs to learn to do things less expensively without resorting to shipping business and industry to slave-wage nations. The only other option is uncontrolled collapse.