Unemployment Insurance Tax To Drop In Maryland
ANNAPOLIS, Md. (AP) — Many Maryland businesses will see their unemployment insurance rates drop by more than half next year, because the state’s trust fund for the payments has a much stronger balance compared to last year, state officials announced Monday.
Gov. Martin O’Malley said the tax rate will drop by at least $100 annually per employee for many businesses from about $187 for each employee this year.
“Part of consumer confidence is also business confidence, and business owners, I hope, will draw a little more confidence from the fact that they actually see in a very tangible way that our economy is healing,” the governor said at a news conference.
The trust fund now has a balance of about $795 million, compared with $460.2 million on Sept. 30 of last year. Weekly benefit payments have dropped steadily since peaking in 2009.
The rate will move from the most unfavorable tax rate known as Table F to Table C. Table F’s tax rates ranged from 2.2 percent to 13.5 percent of the first $8,500 in annual wages. For Table C, the range of rates is 1 percent to 10.5 percent.
“We’re not yet back to schedule A, but we’re moving in the right direction,” said the Democratic governor.
About half of the state’s employers are in the lowest level of the tax table, and they will receive a 55 percent reduction, O’Malley said. All businesses will benefit from the changes, officials said.
O’Malley also credited business owners for keeping people employed when it was hard to know when better days would come.
House Speaker Michael Busch said the state also has focused on policies to keep as many people employed as possible during tough times.
“I think Maryland’s direction has proven to be the right direction to go in and I think this has played out in the fact that our employment rate and our rate of recovery is growing at more a rapid rate than the surrounding states,” the speaker, a Democrat, said.
State officials also are crediting reforms to the trust fund in 2012 for helping to spark its resurgence. Julie Squire, assistant secretary for the Division of Unemployment Insurance, said Maryland officials decided not to artificially lower the tax rates when the recession increased demands on it. Maryland also did not take out unemployment insurance loans.
“Instead we were able to make some key changes to the unemployment insurance law in order to qualify for federal incentive funding,” Squire said. “It’s important to note, however, that the main components of unemployment insurance — including the amount of benefits and the duration of those benefits — have not been changed. Other states have started to lower benefits or reduce duration and that was not done here in Maryland.”
Maryland was able to get $126 million in federal funds for the trust fund because of changes made in legislation in 2010.
(Copyright 2012 by The Associated Press. All Rights Reserved.)