3/25/2005 - Governor signs unemployment tax and workforce training bill

Gov. Haley Barbour, joined by business leaders, community college presidents and officials from the Department of Employment Security, on Wednesday, March 23, signed Senate Bill 2480 a bill that is a win-win for both businesses and workers. MMA President and CEO Jay C. Moon and Director of Industrial Relations John Baas participated in the signing ceremony Wednesday (see photo). MMA worked closely with the governor’s office and the Legislature to craft this bill and to get it passed. With this bill, businesses will benefit from lower unemployment tax rates and workers will be given the opportunity to learn higher skills that translate into greater incomes. “The passage of SB2480 is positive for everyone and was one of MMA’s major priorities for 2005,” said Moon. “We want to thank the governor and the members of the House and Senate for recognizing the importance of this issue. “This bill will ease the burden of one of the structural costs of manufacturers, which also include health care and energy costs, and will enable them to invest in new technology and to be competitive in the 21st century,” he said. Before signing the bill into law, Barbour said, “In my State of the State address in January, I proposed reforming our state’s unemployment tax formula as another job creation effort. “Because Mississippi businesses have been paying too much in unemployment taxes, this bill will reduce the tax and provide a diversion to fund additional workforce training programs that keep unemployment low,” said the governor. Small businesses in Mississippi are responsible for more than 80 percent of all new jobs in the state. One of the many taxes they pay is the unemployment tax, which goes into an unemployment trust fund and is then used to pay unemployment benefits. Over the last 20 years, because of flaws in the formula used, the state has been collecting much, much more in unemployment taxes than is needed to pay unemployment benefits. The state’s unemployment reserve fund has grown to $684 million despite the fact the state generally pays out only $150 million a year in unemployment benefits, yet the fund continues to grow. If these flaws were not corrected, every business, large and small, would pay more unemployment taxes than necessary. While none of this excess money can be used for state government costs, the tax can be reduced. And, as 23 other states have done, a portion of the new formula will be redirected to fund additional workforce training programs that help keep unemployment low. For example, without restructuring the unemployment tax formula, Mississippi’s unemployment tax would have automatically increased by $35 million this year; this is $35 million that businesses could use to create new jobs. Senate Bill 2480 not only prevents an unnecessary tax increase this year, it will actually decrease the unemployment tax burden of businesses over the next several years. The fund is large enough to do this while ensuring ample funds to pay benefits. As an additional component of this legislation, the bill creates a Workforce Training Enhancement Fund, which will provide approximately $20 million a year for workforce training activities to supplement community and junior college workforce training dollars. “With this new money supplementing current appropriations, we can have one of the nation’s best programs for attracting and keeping better, higher paying jobs,” Barbour added. [PHOTO: MMA President and CEO Jay C. Moon (seated, far left) comments following Gov. Haley Barbour’s (seated, center) signing of the unemployment tax and workforce training bill Wednesday in the state Capitol. MMA Director of Industrial Relations John Baas (standing, third from left) also was among those participating in the signing ceremony.]

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