What would happen if unemployment premium rates were not increased in 2011?
The state has borrowed almost $890 million from the federal government to pay for unemployment benefits since December 2008. If the state does not increase premiums it will be forced to borrow additional money which must be repaid with interest. The state has already had two years of borrowing which will lead to an automatic increase in the federal unemployment taxes for all employers in 2010. The federal taxes would continue to increase until the state repays all outstanding loans. These increases would impact all employers regardless of their layoff history. By experience rating the increased cost, employers with the fewest layoffs will see the smallest increases in cost while those employers with the most layoffs will see the largest increases in costs.
