Newspaper article THE JOURNAL RECORD

State Employers Due Jobless Insurance Tax Cut

Newspaper article THE JOURNAL RECORD

State Employers Due Jobless Insurance Tax Cut

Article excerpt

Employers do not have to apply for their share of a $54.4- million unemployment insurance tax cut that goes into effect July 1, the deputy director of the Oklahoma Employment Security Commission said Wednesday.

Dave Murrie said the commission will notify employers of their rate reduction in August or September, in time for the cut to be reflected on their third-quarter 1997 report, due in October.

The decrease -- $25 million per year over the next two-and-a- half years -- was made possible by House Bill 1130, by Rep. Lloyd L. Fields, D-McAlester, and Sen. Lewis Long, D-Glenpool. It lasts through Dec. 31, 1999. Currently, depending upon their unemployment experience, employers pay between 1/10 of 1 percent and 5.5 percent in taxes on a maximum salary of $11,100, the taxable wage base for this year. Under the bill, the tax rate cannot be reduced to less than 1 percent, the rate generally assigned to new companies without any unemployment history. Employers qualifying for an earned rate due to their experience history, who are given a rate of 5.5 percent, are not eligible for the reduction. A key reason behind the reduction is the health of the unemployment compensation trust fund, which currently has a balance of about $587 million. This is due in large part to the state's growing economy and low joblessness rate. Oklahoma's unemployment rate for March was only 3.6 percent, compared with 4.2 percent in March 1996. The robust state of the fund also played a part in lawmakers' decision to expand the reduction, from an initial proposal of $20 million to more than $54.4 million. During committee consideration of the new law, Murrie said that the agency likes to maintain a trust fund balance of roughly 1.5- times its largest payout period, which totaled about $265 million. This record payout occurred during a 12-month period at the height of the oil bust, in 1982-83. …

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