In Hawai’i Big Unemployment Insurance Tax Hike Looms

Governor Says Plan Would Reduce Tax Increase
January 17, 2010

HONOLULU — The first issue the Hawaii Legislature will address when it opens Wednesday is the huge increase Hawaii employers now face in unemployment insurance taxes, Gov. Linda Lingle said.

With unemployment more than doubling, the Unemployment Trust Fund is running out of money.

To replenish the fund, employers will be asked in March to pay an almost 1,000 percent increase in unemployment insurance taxes. Some employers have said that big an increase will force them to lay off more employees.

The governor said she has a plan to reduce the increase.

“We will go in and we will ask the Legislature to do two things. One is to change the taxable wage base. Instead of having the base go so high, we will ask for it to be a little bit lower,” Lingle said. “It would save our business $497 million over the next four years.”

The governor said the savings should put more money back in the economy and help prevent layoffs.

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