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.