As unemployment trust fund shrinks, Louisiana lawmakers searching for ways to avoid tax hikes

As unemployment trust fund shrinks, Louisiana lawmakers searching for ways to avoid tax hikes

Ava Dejoie, secretary of the Louisiana Workforce Commission, addresses the state Senate’s Labor and Industrial Relations Committee on Feb. 28, 2020. (By David Jacobs | The Center Square)

As unemployment trust fund shrinks, Louisiana lawmakers searching for ways to avoid tax hikes

(The Center Square) – Louisiana legislators are hoping to find a way to avoid the higher business taxes and fees that could kick in next year to replenish the state unemployment insurance trust fund.

Employers pay taxes to support the fund that pays for unemployment benefits. When it falls below $750 million, the amount of a company’s wages that are taxable increases, benefits decrease, and a program that helps businesses train workers goes away. When it falls below $100 million, Louisiana law mandates that the Louisiana Workforce Commission impose a surtax on businesses of up to 30 percent on taxable payroll.

The fund, which contained more than $1 billion before the COVID-19 pandemic began, now stands at about $99 million, LWC Secretary Ava Dejoie said Friday. The commission has started the process to borrow money from the federal government to pay legally required benefits and expects to have access to up to $200 million around Oct. 1.

 

 

 

 

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