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Nevada jobless tax will remain unchanged for 2012

SANDRA CHEREB
Associated Press

(AP) – The tax rate Nevada businesses pay to fund the state’s unemployment insurance trust account will remain unchanged next year, though the state that leads the nation in unemployment will continue to borrow from the federal government to pay jobless benefits, a state administrator decided Tuesday.

Acting Employment Security Division Administrator Dennis Perea adopted the average 2 percent rate for 2012 after a brief hearing.

Tax rates are calculated on a tiered scale, depending on an employer’s track record for retaining workers. Established businesses with low turnover pay 0.25 percent, while those that have frequent layoffs pay 5.4 percent. All new businesses pay 2.95 percent.

Nearly 36,000 employers, or 63 percent statewide, pay the average rate.

The tax applies to the first $26,600 in employee wages. It was first raised to an average 2 percent last year, up from 1.33 percent.

Nevada’s unemployment trust fund dried up in October 2009. Since then, the state has borrowed $731 million from the federal government to pay jobless benefits. That number is expected to rise to $861 million by September 2012, Perea said.

Besides the state tax, Nevada businesses also will pay a federal unemployment insurance tax of $63 this year. That levy is used to reduce Nevada’s debt to the federal government.

Nevada’s jobless rate has been the highest in the nation since May 2010 and reached a peak of 14.9 percent last year. It has improved and held steady at 13.4 percent for the three months ending in October.

About 80,000 Nevadans currently receive weekly jobless benefits, and more than half – roughly 45,000 – receive extended benefits paid by the federal government. The state program pays for 26 weeks, while federal programs in hard-hit states like Nevada extend the time to 99 weeks.

At Tuesday’s hearing, Brian McAnallen with the Las Vegas Chamber of Commerce said employers know they will have to pay more in the years ahead to replenish the state’s jobless insurance trust fund.

“Nevada businesses are still struggling to keep their doors open and keep Nevadans working,” he said. “We realize rates are going to have to be increased, but we appreciate the hold for next year.”

But Danna Meyer, a Gardnerville resident, complained the agency was “kicking the can down the road” by continuing to borrow. She also said reforms were needed to stem what she called abuses in the system.