No increase recommended in Nevada unemployment taxes
October 9, 2006
A state panel recommended Monday that the average tax rate employers are charged to fund Nevada’s unemployment insurance program remain at 1.38 percent of an employee’s wages in 2007.
Cindy Jones, administrator for the state Employment Security Division, told members of the Employment Security Council that her agency’s research staff recommendation was to “stay the course” and keep the rate at the same level.
Jones will make a final decision Nov. 16 on the council’s unanimous recommendation.
The revenue generated by the tax goes into a trust fund that’s used to pay jobless benefits to laid-off workers.
This year, the fund covered about 1.1 million workers. The fund had $712.8 million as of Sept. 30, higher than projected amount.
It’s about $165 million above a required minimum “solvency” level.
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The trust fund total as of the end of September compares with about $565 million a year earlier. With a 1.38 percent rate in place, the fund should climb to nearly $850 million by September 2007.
Rates paid by employers range from 0.25 percent to 5.4 percent. New employers pay 2.95 percent for up to four years until they get an experience rating that determines whether their rates go up or down. In 2007, the rate will apply to the first $24,600 in employee wages.
Nearly half of the state’s employers pay the lowest rate. The highest taxpayers typically include construction companies and others with high worker turnover rates.
The council made its recommendation after reviewing economic projections and predicted unemployment reports. Nevada’s seasonally adjusted unemployment rate was 4.2 percent in August.
Panel members were told that Nevada’s job growth rate has exceeded the national rate every year since 1984.
About a quarter of the jobs are in the casino-related leisure and hospitality industry, while nearly a fifth are in trades, transportation and utilities.
Government jobs account for 12 percent while construction accounts for 11 percent of the total.
Council members represent employers, employees and labor interests, and are appointed by the governor.