ATLANTA—State officials are trying to figure out how to meet Georgia’s unemployment insurance obligations.
More than 191,000 Georgians received unemployment insurance payments last week. Labor Department officials said the jobless will get their checks, but the fund is running out of money.
In 1999, Georgia’s trust fund stood at $2 billion, and the state suspended payroll taxes to cover unemployment insurance for most employers.
The fund dipped to $703 million in 2003, and has run out of money while the Legislature blocked increases in payroll taxes to support it.
Georgia and other states sought help from Washington in December 2009 and Congress provided assistance, but the government expects to be repaid. A $24 million interest payment is due in October.
President Barack Obama has offered to suspend interest payments until 2014 if states agree to increase unemployment taxes that year.
By law, Georgia must raise employer taxes next year to rebuild the fund.
House Bill 292, pending in the Legislature, would delay a decision to restore the fund and would reduce the unemployment tax businesses are supposed to pay beginning next year.
Triggers for the fund, set to go off next year, could raise the rate by 100 percent. HB 292 would limit the increase to no more than half that amount.
The bill’s supporters have argued that higher taxes during an economic downturn will stifle recovery. They’re looking to a healthier economy to boost hiring, reduce business liability and reduce the tab.
“This legislation buys us a year’s time to come up with a long-term plan best for Georgia,” Labor Commissioner Mark Butler said.
The Georgia Budget and Policy Institute opposes the legislation.
“Nobody wants to advocate for raising taxes significantly on employers when the economy is still recovering from recession,” said Clare Richie, a senior policy analyst with the nonpartisan research group. But “the legislation doesn’t really make any significant changes that would really have any impact on long-term solvency.”
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