Florida’s unemployment system officially goes broke

By Nathan Thomas at August 27, 2009 - 10:40am
Rapid Response

Florida’s unemployment system officially goes broke

Back in April, Florida’s legislative Republicans refused to accept nearly $444 million in federal funding for the state’s unemployment system – money that would have shored up the unemployment trust fund at a crucial time and helped prevent a business tax hike in the middle of the recession.

This week, the Republicans’ stubbornness came home to roost as Florida’s unemployment trust fund officially went broke. For now, the state will be forced to borrow hundreds of millions of dollars from the federal government to keep the system running, but just as we warned in April, paying back that money will cause heavy tax hikes on Florida businesses:

Replenishing the fund won't be pain-free.

Employers will feel a bigger sting under changes lawmakers made this spring to the unemployment compensation tax system.

How much more employers will pay is based on a complicated formula that takes into account such things as the number of workers a business has laid off, its size and the number of years it has been paying into the system.

Of course, it wasn’t just the DLCC, media analysts, and Democratic legislators warning that this would happen; Republican Governor Charlie Crist opposed the decision too. But instead of accepting free money from the federal government, legislative Republicans chose to raise taxes to pay back borrowed money, all while denying extra help to Florida’s unemployed workers and their families.

As we also noted back in April, Floridians deserve better than this.

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