Businesses have been getting hammered by legislative Democrats. For years they’ve been taxed, regulated, penalized and punished in any and every way here in California.
Readers of the ROSCV know well the pain inflicted upon our economy by these measures. Last month, this publication ran a story outlining the devastation caused by one of the most egregious examples of State-led sadism.
But soon, that most horrific tax overreach will come to an end, because thanks to the enduring will of our small businesses to put more and more of our people back to work our unemployment fund will finally be out of the red this April.
For the last seven years employers in California have been picking up the tab for the account which went negative during the Great Recession due to overextended benefits being claimed by a record breaking number of Californians. We simply couldn’t afford the tab to keep the checks rolling out. So we borrowed. The federal government loaned us over $3 billion to cover costs.
But then they came collecting. And rather than collect from the state they came straight to the source; California businesses small and large. Since that time, these businesses have faced astronomical taxes toward paying off the debt. It’s been tough to weather. Some have closed their doors, others imposed layoffs to keep costs down, even more have just scraped by while their profit sheets evaporated.
But on January 1, 2019 there will be a reprieve. Having paid off the state’s debt to the fed’s our employers will finally be off the hook. For some it’ll mean hundreds of thousands in savings each year. For others, a modest but hugely significant $1,000. In either case, a wrong will finally be undone, albeit no thanks to our state government who got these folks in the mess to begin with.
I opposed sticking the state’s burden solely to the business community from the start. We weren’t alone back ten years ago, many state’s had to take a loan from the feds. But we’re the only one who addressed it in this way. General fund revenues could’ve helped, bonds could have been issued as they often are to pay down debts, many remedies were available but Governor Jerry Brown and legislative leaders were intent on punishing the already vulnerable business community instead. A true travesty and a shameful move on the part of those involved.
But true to form our business community got it done. They’ve resurged in ways none of us thought possible. Our unemployment is at near record lows as businesses found creative ways to put more of our folks back to work. They’ve lead California back to its rightful place as the world’s sixth largest economy. And they’ve shouldered the burdens, however unfair, placed on them by their state legislature’s bungling of the unemployment insurance trust.
Good news business owners, the worst is almost over. By this time next year, your unemployment insurance taxes will return to pre-2011 levels. You made it. And the State of California owes you a debt of gratitude. A debt they’ll likely never pay but a debt nonetheless.