The Ford Update– Week 1 March 5, 2010

HOUSE ROLLS BACK UNEMPLOYMENT COMPENSATION TAX

The Florida House of Representatives unanimously passed legislation that will help keep Floridians working, prevent
layoffs, bring a degree of economic certainty to help create new jobs and foster economic growth in Florida. CS/HB 7033 holds down dramatic increases in unemployment tax rates for businesses for the next two years and takes advantage of the time extension for the State Extended Benefits program by covering up to 8 additional weeks for claimants. Approximately 20,000 Floridians would be eligible to receive extended benefits.

“Recharging Florida’s economy and putting Floridians back to work is our top priority this year. Making sure that employers can afford to keep the employees they already have is part of that agenda,” said House Speaker Larry Cretul. An increase in the unemployment tax would have resulted in increased lay offs and job loss. It was important for us to protect the small business owner. Overwhelmingly business owners requested we give them relief.CS/HB 7033 makes several changes to the existing law
including:

- Reduces the taxable wage base from $8,500 down to $7,000 for the next two years. This change will have the effect of reducing employers’ unemployment compensation taxes for 2010 and 2011. The rate will return to $8,500 in 2012, and sunsets back to $7,000 in 2015. Regardless of the balance in the Unemployment Com-pensation Trust Fund, no rate increase will be trig-gered for the next two years. Rates will begin to rise again in 2012, but forecasts indicate our economy will be stronger and hopefully employers will have used the time to plan for the higher costs.

- Grants employers the ability to make their 2010 and 2011 tax payments in quarterly installments without interest or penalties if the employers make the quar-terly filings and payments on time. The payment of interest on federal advances will be made through an employer assessment.

- Provides an extension of the State Extended Benefits program which is 100% federally funded. This ex-tension will cover up to 8 additional weeks for claimants. Approximately 20,000 Floridians would be eligible to receive extended benefits.
The bill passed the Senate and was signed by the Governor the first day of Session. The rapid movement of this bill shows the importance to Florida and the effort to protect our economy.

2010 Legislative Session Outlook

Our top priority is recharging Florida’s economy and putting Floridians back to work.

- The best way to strengthen Florida’s financial future is to restore economic prosperity to Floridians.

- That’s why we are opened the Session by reducing unemployment taxes on Florida employers.

- Keeping Floridians on the job is vital to helping our economy recover. It is better right now for Florida employers to use their dollars to keep Floridians working rather than be forced to lay off employees in order to afford a higher unemployment tax bill.
House Republicans are committed to responsibly balancing the budget and ensuring that state government lives within its means.

- That means balancing the budget with existing revenues.

- We are setting meaningful priorities with the taxpayers’ dollars and making the tough choices necessary to balance the budget in these economic conditions. These decisions are being made at kitchen tables and conference room tables throughout Florida and state government must make the same. Being fiscally responsible means ensuring the state has budget reserves appropriate for the fourth largest state in the nation.

-Because we made sure there were adequate reserves this past year, the Legislature was not forced to come back and reduce the budget further when Medicaid costs grew and revenues came in below expectations.

-Reserves also help maintain the state’s AAA bond rating. That top tier bond rating saves taxpayers mil-lions of dollars a year in financing costs; it saves bil-lions of dollars long-term.

Floridians want a High Performance Government that works. A state government that focuses on the important things and does them well, not one that tries to do all things for all people.

High Performance Government means:

- State Budget that is Responsible
- State Government that is Accountable
- State Laws that are Clear
- State Agencies that are Efficient