Unemployment insurance bill will increase tax burden for Vermont businesses
Without legislative intervention, Vermont businesses will experience an enormous increase in the unemployment insurance tax rate as a result of COVID-19-related claims. A Senate committee has passed a bill to delay that increase, but at the same time also voted to add significant new benefits that will further increase costs to employers.
The Unemployment Trust Fund is paid through a UI tax on business owners. Pre-COVID, the fund had a robust $500 million balance. The tax is calculated in five schedule rates, with Schedule 1 the lowest. Higher rates kick in if the trust fund balance decreases, which it has by more than 50% due to pandemic-related business shutdowns and resulting increases in unemployment. Without legislative intervention, the resulting UI tax rate jump to Schedule 5 would cost a majority of businesses $186.00 per employee, more than tripling the current contribution of $58.00 per employee.
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MONTPELIER â How might a bill being drafted in a state House of Representatives committee succeed where other initiatives failed in finally bridging Vermontâs digital divide?
The game-changing element, according to the effortâs supporters, comes down to an essential Vermont quality: self-government, in the form of locally chartered, volunteer-staffed Communications Union Districts (CUDs), empowered by state law to behave as municipal utilities in finding solutions to the lack of high-speed service in rural areas.
The bill, which is being written by the state House Committee on Energy and Technology, would give a newly-created public authority the ability to lend funds to CUDs â the local government entities authorized by an act of the Legislature in 2019 to tackle a digital access gap affecting about one out of every five Vermonters.
Project based TIFs would expand rural redevelopment
The Senate Committee on Economic Development, Housing and General Affairs is considering S.33, a bill that would allow more towns to apply for project-based tax increment financing. TIFs allow municipal governments to fund new private infrastructure projects through the anticipated tax revenue that results from the new projects.
S.33 would create a pilot program limited to six projects with a $1.5 million cap per application. This bill was considered last year with a higher limit but was lowered to get the support of the Senate Finance Committee chair. Witnesses testified this week in favor of increasing the cap to at least $4 million.