Legislation suspending a dramatic unemployment compensation tax increase passed both houses of the Legislature and was signed into law on the opening day of the legislative session. The bill, CS/HB 7033, passed the House unanimously before noon and passed the Senate, also unanimously, four hours later. Gov. Crist signed the bill into law just before beginning his State of the State address that evening.
An unemployment tax fix was a top priority for business groups. The minimum unemployment tax rate was about to increase from $8.40 per employee to $100.30 per employee. Under the new law, the minimum rate will be $25.20 per employee. The maximum rate will remain $378 per employee.
The tax increases were triggered by shortfalls in the state unemployment compensation trust fund, which funds unemployment benefits. According to the House staff analysis of the new law, “this will result in greater borrowing from the federal government to pay benefits, more interest due to the federal government on that borrowing than under current law, and a delay in restoration of a positive fund balance.” According to the House sponsor of CS/HB 7033, the amount of borrowing could exceed $4 billion, with interest costs of $658 million.