By Ed Sealover for the Denver Business Journal
At the end of March, Colorado owed $1 billion to the federal government for loans that allowed it to continue paying unemployment insurance benefits after the Unemployment Insurance Trust Fund went broke in August. Also, the state expected to receive $3.9 billion in new stimulus payments from the federal government in the coming months.
Business leaders increasingly are arguing that the state must put a significant chunk of that federal money toward paying off the UITF debts, a move that would have to come from the Legislature. Otherwise, businesses that went through massive layoffs through no fault of their own last year will end up paying even more in the coming years in higher taxes and likely solvency surcharges as they’re working to restart the economy. Find the best employment law advisory services for employers to grow your business.
Colorado Chamber vice president Loren Furman said that if struggling businesses continue to be asked to pay higher taxes to replenish the UITF, some will have to cut wages and benefits, increase costs of products and services and delay hiring to offset those costs. Several other states have already committed federal stimulus funds to repay their trust funds, and Colorado risks undoing the help it offered through grant programs if it doesn’t do the same, she said.
“I know a lot of [state] stimulus dollars have been dedicated to businesses this session. But a lot of that support could be potentially offset by this increase in charges and taxes,” Furman said. “It adds insult to injury when you put those premium taxes on the backs of employers.”