January 22, 2010

TALLAHASSEE – Over the past several weeks and as recently as this morning, Associated Industries of Florida (AIF) has been in discussions with the Governor’s Office, Senate and House to identify a solution for the significantly increased unemployment compensation payments every business in Florida must remit to the state by the end of the first quarter. Several
proposed solutions which AIF and our members can support for reducing employers’ tax rates in 2010 and 2011 have risen out of these discussions, including:

• A quarterly payment plan that lets employers spread out their unemployment compensation payments over the whole year without penalties or interest.
• A reduction in the amount of each employee’s taxable wages – from $8,500 back down to $7,000 for 2010 and 2011.
• The elimination of all provisions in last year’s legislation that would have allowed the state to replenish the Unemployment Compensation Trust Fund balance more quickly.

“In these very trying times, many small and medium-sized businesses are just trying to hold on and survive. A down economy coupled with a growing lack of access to capital has hamstrung businesses’ ability to make these payments in full over such a short period of time,” said Barney Bishop III, president and CEO of AIF. “AIF and our members around the state appreciate the commitment by Gov. Charlie Crist, Senate President Jeff Atwater and House Speaker Larry Cretul to finding a resolution that brings businesses relief and protects jobs. We applaud their attention to this critical fiscal issue, which could easily exacerbate our weakened economy and rising unemployment rate.”

Last year, the business community worked diligently to revise the unemployment compensation system because the trust fund was almost depleted. Unfortunately, the number of Floridians unemployed grew faster and the overall percentage of unemployed was much higher than originally projected. Consequently, that led to huge tax bills that businesses are just now receiving and still must pay in full in April.

“With today’s unfortunate, but not unexpected, announcement of a record unemployment rate of 11.8 percent and expectations that it will be at least another six months before Florida’s economic outlook begins to improve, it is encouraging to know our leaders appreciate the gravity of the situation and will work with the entire business community to fix it the best way we can for everyone,” added Bishop.