Texas Unemployment - KTEN.com - No One Gets You Closer

Texas Unemployment

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Texas business owners listen up! Your state unemplyment tax that you pay per employee, is going  up.  Turns out, mounting layoffs are close to exhausting the states trust fund.   KTEN's Sterling Riggs has the story.

Naif Risk owns Risk Shoe Store in downtown Shreman.  His grandfather started the business back in 1921.
Risk said, "My grandfather told me when times get tough, you'll know it in the shoe business and he was right.  People are fixing their shoes, not buying new ones."

No matter what type of business owners are in, things are about to get a little tougher in the state of Texas.
The unemployment rate has risen from 4% to 6.7% in recent years.  On average business owners like Risk pay $90 a year per employee in unemployment tax.  The expected increase will have business owners forking out $150 dollars per employee. That's a 60 dollar increase.  Risk has three employees and says even though his business is small, they are still going to feel the affects.

"It won't cause me to raise prices, we'll just have to absorb it. It will just be a little more out of our pocket.   It's just another tax." 

Texas Workorce Comission Chairman Tom Pauken recently released a statment warning all businesses that the increase is on the horizon.
Pauken said, "Because of the increse, the Texas unemployment trust fund is going to have a zero balance in July."

The problem is so immediate that Pauken and two other commissioners had to authorize borrowing 2 billion dollars from the federal government in no interest bonds just to build the fund back up.


"The system is in place so it will be an automatic increase, but with this no interest loan and bond that were looking at, it will stagger the increase to keep it lower then it other wise would be. When the economy bounces back, we will have reserves." said Pauken.

The move came nearly three months after Governor Rick Perry rejected $556 million dollars in federal stimulus money for unemployed texans.  Perry said congress attached too many strings to the money.   But no matter who the state borrows the money from, the bottom line is all size businesses will be affected.

"I think it is a good idea we din't take tax money.  The state of Texas can handle their own problems without the fed's interferring.  So if we have to pay a little more tax now maybe it will help us down the road" said Risk.  The new tax rates won't be set until december which means the new higher tax rate will not go into affect until January 2010.

Story by Sterling Riggs.  

 

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