Staff Writer
After just one day of session, business owners across Florida are able to breathe a little easier following quick passage of a bill that will delay the unemployment compensation tax increase for a couple years.
The bill (HB 7033) will delay a large increase, more than 1,000 percent for some business owners, caused by the depletion of the state’s unemployment compensation trust fund. The increase was an automatic trigger clause from a prior bill, SB 810, to replenish the fund when it reached a certain threshold while also paying back the $1.2 billion borrowed from the federal government to cover the trust fund.
“It’s what we wanted the legislature to do,” said Barney Bishop, president and CEO of Associated Industries of Florida. “We’re ecstatic that they (the legislature) have listened to the business community.”
Without passage, the rate increase would have raised the minimum annual rate from a little more than $8 per employee to more than $100 per employee with the maximum increasing from $378 to $459. Bishop said that was counterproductive for business owners who would have to choose between paying the increase or potentially laying off employees or even shutting their doors in some cases.
State Rep. Jennifer Carroll, one of the presenters of the bill, said the measure will provide temporary relief for business owners already facing hardship in the down economic times.
“It’s part of the cost of doing business,” said Carroll. “The money will still have to be paid back but this gives business owners time to budget accordingly over the next couple years.”
Following opening speeches by their respective leaders, the bill was one of the first issues considered by both the House and Senate before being signed by Gov. Charlie Crist prior to his State of the State speech last night. Business owners would have had to begin paying the tax and its increase April 1.
“There is no better message to send to our fellow Floridians on the opening day of the 2010 Legislative Session than quick, united and diligent action,” Crist said before signing the measure.
Carroll said she and her colleagues in the House and Senate worked with the business community on the issue. She said she believes its relative ease of passage after one day shows how the issue affects everyone. The rate now, she said, is around 38-39 percent and will hopefully keep business doors open.
“It impacts us all,” she said, “across every political spectrum.”
Locally, Jacksonville Regional Chamber of Commerce members were celebrating the bill’s passage, as it was one of the early issues business owners were voicing their concerns, said Jessica Deal, chamber director of business advocacy.
“There’s pressure on businesses to keep their employees and hire new employees to help spur the economy,” said Deal. “The increase was significant and would have been overwhelming for many business owners.”
Sandy Bartow, chamber small business executive director, said while business owners could see three times what they’re accustomed to paying when it comes to the tax, passage of the bill caused a “sigh of relief” for business owners.
Carroll, Deal and Bartow all said they were hopeful the measure and two-year window would allow time for the economy to further recover and encourage additional businesses return to Florida. Close to 37,000 businesses have folded within the past year, they said, and adding back to the overall number of unemployment compensation contributors would lessen the burden on the collective business community.
In addition, businesses will be able to pay their unemployment compensation tax through installments throughout the year instead of a one-time payment within the first three months, another plus for struggling businesses, said Bishop.
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