By Ed Sealover, Denver Business Journal
Colorado businesses that anted up to bail out the state’s Unemployment Insurance Trust Fund during the last recession may be asked to do so again even before the next downturn hits, in order to try to prevent insolvency of the fund.
State Rep. Chris Hansen, a Denver Democrat and member of the influential Joint Budget Committee, said at a JBC briefing this week that he is “very committed” to addressing during the legislative session that begins on Jan. 8 a UITF fund balance that the state describes as being $400 million below the level of meeting solvency recommendations. While he said that he is open to exactly how to do that, one of the main focuses of discussion thus far is increasing the wage base on which employers are taxed to fill the fund — a base that right now sits at $13,100.
Business leaders have discussed this possibility with the Colorado Department of Labor and Employment for roughly three years now but have been reluctant to move forward with an increase in taxes paid by employers because they stopped paying a special solvency surcharge just two years ago that was added in 2011 in order to pay off bonds the state sold in order to refill the UITF fund after it ran dry during the Great Recession.
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Loren Furman, senior vice president of state and federal relations for the Colorado Chamber of Commerce, said that CDLE officials have told her that raising the wage base to $24,000, a number that has been discussed, would result in a roughly 30% premium increase to 75% of the employers in Colorado, with only those who have gone the longest without layoffs being excluded. Given that employers just got relief from existing payments and that they are facing a slew of other regulations that will increase labor costs, she doesn’t believe the business community should have to shoulder more of the burden right now, before a problem exists.
“We’ve been subsidizing the fund to get it up to solvency through 2017. Now you would be asking our members to pay a higher premium in a good economy with health-care costs rising, minimum wage increasing and potential paid-family-leave requirements coming,” Furman said. “Maybe the General Assembly needs to dedicate some funds to the UI Trust Fund rather than raising it on the backs of business.”
Read the full article at the Denver Business Journal…