Kentucky House passes bill that increases taxes, cuts jobless benefits | News

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Kentucky House passes bill that increases taxes, cuts jobless benefits

On Feb. 8, the Kentucky House passed a measure that would increase taxes on businesses, as well as cut unemployment benefits, to strengthen Kentucky's unemployment insurance trust fund, according to The Courier-Journal. The bill passed 97-0 and now will move on to the Senate.

Kentucky's unemployment rate was 10.7 percent in December 2009, and the state has borrowed $645.1 million from the federal government since January 2009 to pay for workers' unemployment benefits. If legislators do not take action, Kentucky businesses would have to repay the money in the form of higher federal payroll taxes.

The bill gradually would increase the wage base on which employers pay state taxes from the first $8,000 to $12,000. Additionally, maximum unemployment benefits would drop from 68 percent of previous wages to 62 percent, and unemployed workers would have to wait one week before claiming benefits.

A task force appointed by Gov. Steve Beshear (D-Ky.) agreed to the changes in December 2009 after months of negotiations. Beshear commended the House for passing the bill and credited the task force for "balancing the needs of a growing pool of unemployed Kentuckians with the needs of a strapped business community during a historic economic downturn."

Beshear has urged the Senate to also pass the bill.

2/11/2010