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Business Leaders Say Looming Tax Hike Would Be 'Extremely Detrimental'

3:01 PM, Oct 10, 2011   |    comments
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TALLAHASSEE, Fla. -- Florida businesses are not happy with a big increase in their unemployment compensation taxes. The taxes have gone up a lot in the past two years because so many people have lost jobs and started collecting unemployment benefits.

Now businesses are looking at another big tax hike and they're searching desperately for an idea to ease the tax pain.

Florida businesses currently pay a minimum unemployment tax rate of $72.10 per employee. Just two years ago, that tax was only $8.40 an employee.

Now it looks as though that tax rate could hit $200 in 2012 and that's making Florida businesses nervous.

"It's going to potentially play havoc here in Florida and on Florida's employers when we're trying to climb out of this hole we're in right now with unemployment and a terrible economy. So this is going to be extremely detrimental to Florida's employers," said Brewster Bevis of Associated Industries of Florida.

Florida ended up in this situation because its unemployment compensation trust fund went broke in 2009, just as it did in a lot of states because of rising unemployment. So states, including Florida, have been borrowing money from the federal government to keep paying jobless benefits.

Florida's loan from the feds peaked at $2.6 billion. About a billion has been paid off, but the tab stands at $1.6 billion and all of it must be paid by Florida businesses.

Gov. Rick Scott says he wants to minimize the impact.

"I don't want to do anything to raise the cost of doing business in the state. I want to keep that as low as I can because that impacts jobs. So the biggest thing is jobs, jobs, jobs."

Businesses want the state to borrow cash to pay off the loan so they can pay it off in installments. Bevis said the state could create an entity to issue bonds that would be paid off by the private sector.

He said Idaho has already taken that action and more states are considering the idea.

"We need to look at other avenues to take care of this debt and ease the pressure on Florida's employers."

The federal government forgave Florida all interest on unemployment compensation loans made before 2011.

Asked if he would consider asking the feds to forgive future interest payments, or perhaps the whole debt, Gov. Scott said he would at least consider that idea - an interesting response considering Scott has previously turned down federal money for high speed rail and health care.

First Coast News

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