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The Honolulu Advertiser
Posted on: Friday, March 12, 2010

Employers spared huge tax increase

Advertiser Staff

Gov. Linda Lingle has signed a bill that will lower employers' unemployment insurance taxes this year, but is calling for the Legislature to enact other changes that will result in greater savings.

Lingle signed the bill yesterday, averting an almost 12-fold increase in average unemployment taxes that was to occur in April.

The rates are being raised to rebuild the state's unemployment benefit trust fund that is being depleted because of Hawai'i's high jobless rates.

The average tax would have risen from $90 annually per employee to $1,070 this year if not for the legislation that was fast-tracked by lawmakers. The measure reduces the average increase to $630.

The rates would also be lower next year than they would have been if some relief had not been granted.

Rep. Karl Rhoads, D-28th (Pālama, Chinatown, Downtown), who crafted the measure, has said employers are getting $241 million of payments deferred over the two years of relief being granted.

Lingle encouraged lawmakers to give employers an even larger break.

"I urge the Legislature to take up this matter next year and pass a bill similar to the one I proposed that would have saved employers $497 million and kept close to a half-billion dollars in our local economy," Lingle said in a press statement she issued after signing the measure.