LUBBOCK, TX (KCBD) - Thousands of Texas employers will pay nearly three-times more in unemployment insurance next year. New this morning, we're finding out what that means for our local businesses.
When you break that down into dollars, employers who pay the minimum tax for unemployment insurance will pay more than $40 more per employee next year. The minimum rate will go from point 0.26% in 2009 to 0.72% in 2010.
That tax, paid by nearly 255,000 employers breaks down to $64.80, compared to $23.40 in 2009. The minimum tax is for employers who've been in business for less than a year.
Employers who've been in businesses more than a year will pay about $76 more. Basically, with more unemployment benefits going out, and fewer employees to draw from, the money is needed to replenish the Texas Unemployment Compensation Trust Fund.
Financial planner Mark Bass says this is the largest increase he can recall. "If a business is already really tight, then one other expense going up makes it a little bit tougher. Someone that has a lot of employees it could be a really significant amount of money," Bass said.
Still, Bass says the benefits paid out are important to keep those out of work afloat. Right now, about 700,000 Texans receive benefits, costing the state nearly $69-million a week.
"The unemployment tax increase came as no surprise considering the down economy and the unemployment rate," Lubbock Restaurant Association President and River Smith's CEO John Corcorran said. He says businesses are concerned that tax increases, and the higher minimum wage could lead to flat or even decreased sales projections.
"With businesses unable to pass extra expenses on to consumers, due to competitive market conditions, it all adds up to less profitability and cash flow. There could be businesses closing their doors, because they can't afford to pay the higher costs of doing business," Corcorran said.
The TWC points out that the Texas tax is blow several states. For instance, Arkansas has a $120 tax.
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