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JUNE 2, 2010 | Policy Points by COMMONWEALTH FOUNDATION
Pennsylvania Budget Facts 2010: Unemployment Compensation
Pennsylvania has borrowed over $3 billion from the federal government to keep its unemployment compensation fund solvent. Only California, with three times the population and a much higher unemployment rate, pays out more in unemployment claims.
FEBRUARY 17, 2010 | Commentary by ELIZABETH STELLE
The True Cost of Unemployment Compensation
Pennsylvania's unemployment compensation fund is bankrupt. Beginning in March 2009, the Keystone State borrowed over $2 billion from the federal government to keep it solvent. Unfortunately, unemployment continues to grow, making a bad situation worse. Since December 2007, Pennsylvania has lost more than 200,000 jobs. It is imperative tha
Recent Blog Posts
FEBRUARY 13, 2012
House Moves Unemployment Compensation Reform
More Unemployment Compensation reform is moving through the Pennsylvania House. Yesterday, HB 1754 sponsored by Rep. Ron Miller, and HB 1852 sponsored by Rep. Seth Grove, cleared the Labor and Industry Committee. Both bills are designed to strengthen anti-fraud provisions.
Specifically, HB 1754 would establish a definitive definition of "willful misconduct." Currently the vague definition often allows employees who are fired for their own misconduct to collect unemployment benefits. HB 1852 increases the number of weeks individuals who commit UC fraud are barred from collecting benefits, called penalty weeks, from four to 10 weeks. The bill also removes the four-year limit on the imposition of penalty weeks.
Pennsylvania's Unemployment Compensation system is broken and bankrupt. The state paid $227 million in fraudulent claims last year and still owes about $3 billion in loans. The state started borrowing money from the federal government to pay claims in March 2009 and ran up a debt of almost $4 billion at its peak.
These bills are a step in the right direction, but far from the substantive reform the House dismissed last spring.
posted by ELIZABETH STELLE | 05:55 PM | 0 comment
DECEMBER 28, 2011
Map: PA Among Highest Unemployment Tax Rates
The Tax Foundation has a new map showing unemployment insurance tax rates. As you can see, Pennsylvania has one of the highest tax rates in the nation.
The unemployment insurance tax is a payroll tax imposed on employers/employees—a higher rate makes it more expensive to hire workers.
Moreover, the effective rate is expected to go up, as Pennsylvania's Unemployment Trust Fund is more than $3 billion in debt. Last week the state House passed legislation to issue $3.5 billion in bonds, to pay off the loans owed to the federal government, and effectively get a lower interest rate, while legislation passed this summer would provide modest savings.
But neither solves the inherent problems of an unemployment system that is quickly drained during recessions, making it increasingly costly to hire workers in a bad economy.
posted by NATHAN BENEFIELD | 02:03 PM | 0 comment
OCTOBER 28, 2011
PA's High Unemployment Taxes
Pennsylvania employers pay some of the highest unemployment insurance taxes in the nation, according to a new study by the Tax Foundation. Tax rates vary based on the frequency of layoffs. If a company frequently lays off employees, their unemployment insurance taxes will be at or near the maximum rate. But if a company rarely lays off employees, their tax rate will be close to the minimum rate.
Nationally, Pennsylvania has the highest minimum employer tax rate, which ranges from zero to 2.7 percent. The state's maximum employer tax is the fourth-highest in the nation.
The study also found states raise unemployment taxes on employers during times of high unemployment and lower them during economic booms. This pattern makes it more difficult for businesses to hire when unemployment is high and easier when jobs are plentiful.
posted by ELIZABETH STELLE | 10:46 AM | 0 comment
