Unemployment tax rate won’t go up
October 16, 2002
With economic recovery on the horizon and $100 million more than the minimum needed in the fund, the state Employment Security Council decided Tuesday to keep the tax rate businesses pay the same as it has been for the past four years.
Birgit Baker, head of the Employment Security Division, said the council will vote on the rates after a Nov. 18 public hearing, but that she expects the total average rate to stay at 1.34 percent. That includes 0.05 percent dedicated to the state’s Career Enhancement Program.
Employment Security Division collects the tax from 46,886 employers who do business in Nevada and uses the money to pay unemployment benefits to those who lose their jobs.
“What they supported is that now is not the time to raise rates during an economic recovery,” she said.
Baker said there was no employment growth in Nevada during 2002, but that staff members project jobs will increase 2.5 percent in 2003. At the same time, she said the average unemployment rate is expected to decrease from 5.7 percent this past year to 5.4 percent.
The slumping economy combined with the impact of Sept. 11 on Nevada’s tourism industry caused layoffs that jumped unemployment in the state to 6.6 percent in December before it started to recover. Even with the added drain on the unemployment fund, Baker said the state had $479.2 million as of Sept. 30. She said that is in large part because of a $68.1 million cash infusion from the federal government to help states stimulate their economies.
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She said the state is projected to finish fiscal 2003 with $431 million in the account — $85.7 million more than the minimum $345.6 million needed to ensure solvency.
Economists project the best job growth in Nevada this coming year will be in retail trade — 3.3 percent. But government — primarily added school teachers in southern Nevada — will increase an estimated 3.1 percent, services and construction by 2.5 percent each.
Mining, however, is expected to lose more than 4 percent in 2003.
Overall, the job growth rate is expected to average 2.5 percent.