On the heels of a surprisingly positive national unemployment report, where the jobless rate fell for the first time in months, the state of Nebraska has announced that it will be increasing the tax levied on businesses to help replenish their dwindling unemployment insurance fund, the Associated Press (AP) reports.
Nebraska is one of 33 states that are expected to increase unemployment tax in 2010 due to the high number of people who claimed joblessness over the past year.
Although most states are required by law to build up unemployment insurance funds in prosperous times to avoid tax increases in a recession, Nebraska is one of the many states whose funds have become depleted. Additionally, Nebraska’s constitution doesn’t allow it to borrow money from the federal government to help supplement state trust funds.
The hike in the unemployment tax will be especially detrimental to small business owners, who create about 60 percent of all new jobs in Nebraska.
"This is a job killer," said small business owner Rick Poore, quoted by the news source. "This isn’t going to help anything," he added.
"Hopefully employers have been preparing for this, but it will be a surprise to some," said Ron Sedlacek, general counsel for the Nebraska Chamber of Commerce, quoted by the Los Angeles Times. "It really just depends on how much they’ve been monitoring [the] situation," he added.