A state senator is calling on Congress to bail out California and stop employers frompicking up the tab on a $20 billion debtGov. Gavin Newsom andDemocratic lawmakershave so far refused to pay.
Senate Minority Leader Brian Jones issueda joint resolutionwith other Republican state senators urging Congress to suspend looming federal payroll tax increases tied to the state’s unpaid unemployment insurance (UI) debt.
California employers will soon pay a 5.2% payroll tax — nearly nine times as much as those in other states that are debt free, according to the California Business Roundtable.
The burden could be especially hard on small businesses, which account for 99.8% of all businesses in the state and support 7.6 million jobs, according to Jones’ office.
“Every other state paid down its debt, but not California,” Jones said in a statement, arguing that businesses are being forced to absorb the cost of California and Newsom’s passing of the buck.
“Now, businesses that survived shutdowns, kept employees on payroll, and held their communities together will pay for Gavin Newsom’s failures.”
Most states used federal stimulus funds to pay down their unemployment debts, but California instead directed money toward infrastructure, homelessness and other priorities.
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Jones’ measure asks Congress to stop raising federal unemployment taxes on businesses when a state’s own actions — like forcing shutdowns during COVID-19 or failing to prevent unemployment fraud — caused the debt in the first place.
Employers are expected to pay an additional $42 per employee in federal payroll taxes this year to help chip away at the debt, with the amount expected to rise annually until the balance is paid off.
Source: California Post – Breaking California News, Photos & Videos
