Idaho slashes unemployment insurance tax rates

Idaho slashes unemployment insurance tax rates

Idaho Governor C.L. “Butch” Otter signed the first bill sent to him this year by the Idaho Legislature today, immediately reducing unemployment insurance tax rates and saving Idaho employers about $115 million over the next three years.

“I congratulate and thank the Legislature for accepting my challenge to make this commonsense tax relief ‘Job One’ for the 2018 session,” said Governor Otter, who was joined by legislative and business leaders at the Capitol for a signing ceremony. “Idaho’s job creators large and small will benefit from this needed adjustment, and our already booming economy will get another boost as a result.”

House Bill 335 – passed unanimously by both the House and Senate – will ensure the continuing solvency of Idaho’s unemployment reserve fund used to pay benefits. It lowers rates for taxpaying businesses retroactive to January 1, 2018.

Some employers’ taxes will be reduced by 30 percent over three years. All businesses that pay the tax will see a reduction, except for the most deficit-rated employers – those with former employees who receive more in unemployment benefits than the business pays into the unemployment insurance trust fund.

The statutory changes will keep the fund growing, but at a slightly slower rate – maintaining the financial capacity to pay unemployment insurance benefits even in the event of another recession the magnitude of the Great Recession.

“Idaho businesses want consistency when paying unemployment insurance taxes,” Idaho Department of Labor Director Melinda Smyser said. “The strong, sustainable level of our reserve funds will enable us to provide earned benefits even in the worst of times, without borrowing money to do it.”

With a balance of $781 million as of December 2017, Idaho ranks among the top states in the nation for solvency – the ability to pay unemployment insurance benefits during economic downturns.