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Unemployment insurance rates for all Idaho
employers will reach their legal maximum in 2010. The greatest job loss the
state has experienced since World War II pushed unemployment insurance benefit
payouts to a record in 2009 and drained the state’s federal unemployment
insurance trust fund. Established by law, Idaho's rate setting formula requires
tax rates in the seven positive-rated classes and the standard rate to increase
nearly 115 percent. The six negative-rated class rates, which will rise 26
percent to 79 percent, have been closer to the legal maximum than the others.
At the same time, the maximum weekly benefit
claimants can receive will drop from $362 this year to $334 in 2010, reducing
the total benefit payout by nearly $19 million.
Since the recession began in
December 2007, the number of unemployed Idahoans is up from under 27,000 to over
67,000. The payout of regular unemployment benefits rose from $123 million in
2007, to $210 million in 2008, to what will approach $400 million in 2009. In
all three years, employers paid less in taxes than what was paid out in
benefits, resulting in the trust fund going broke. This will be the case once
again in 2010 despite the latest tax rate increase. Idaho is currently borrowing
from the federal government to continue paying benefits to the unemployed -- $75
million to date and up to $210 million total.
Employers, however, entered the current recession
with $350 million more than they would have because of 2005 unemployment
insurance revisions that halved the target balance for the trust fund and made
rates more responsive to economic activity, resulting in record low tax rates in
2007 and 2008. It also resulted in the 70 percent rate hike in 2009 and rates
hitting the legal maximum in 2010, but even then, increased payments by
employers through 2010 will total under $200 million.
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