The Oregon Biz Report - Business News from Oregon

February 24, 2009

By J.L. Wilson
Associated Oregon Industries,

A package of unemployment bills introduced in the past week may substantially add to employers’ tax liability concerns, according to numbers furnished by the Oregon Employment Department.  SB 461, SB 462, and SB 463 were introduced and assigned to the Senate Commerce & Workforce Development Committee, where SB 462 and SB 463 received their initial public hearing this week.

SB 462, which establishes an alternate base year when an unemployment applicant lacks sufficient wages in the current base year, is needed in order to capture $90 million in federal stimulus funds.  This cash infusion into Oregon’s unemployment trust fund may help employers avoid a potential tax rate increase in the current economic downturn.

However, when combined with SB 461 (work training benefits) and SB 463 (benefits for part time workers), the package of bills would add 17,000 Oregonians into the insurance program at a cost of $45 million in 2009-11 and another $75 million in 2011-13.  The Employment Department would also need to add over 70 full time employees to support these new provisions.  The troubling aspect of these bills for employers is that the ongoing costs associated with these bills will continue, perpetuity, long after the $90 million in federal funding dries up.  Employers may well face an additional tax burden to pay for these measures when the federal funding is depleted.

AOI testified on these bills in the Senate Commerce Committee, warning committee members of the significant, ongoing liability faced by employers once the federal money dries up.  The AOI Employment Practices Steering Committee will recommend an official AOI position on these bills this week.  AOI will continue to stay on top of these measures.

You can read the Employment Department summary of the bills here.

— More information on  Associated Oregon Industries

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