Unemployment-insurance tax rates will not drop in 2011

September 30, 2010|By Jamie Smith Hopkins, The Baltimore Sun

Maryland employers will continue paying the maximum rates for unemployment insurance next year because the amount of money in the state trust fund for jobless benefits hasn't improved enough to trigger a decrease.

The state Department of Labor, Licensing and Regulation will make an official calculation shortly, but officials there said Thursday that the $271 million fund balance falls far short of the $510 million needed to automatically drop the rates to a lower tax table. Employers will continue paying $187 to $1,147.50 per employee next year, depending on their layoff history.

The $271 million balance does not include a cash advance the state received from the federal government early in the year — and will pay back by the end of December — to help keep it solvent.

The fund is in better shape than it was in January. The state received more than $125 million in federal incentive payments for approving changes to the unemployment-benefits system, and benefit payments have fallen to a nearly two-year low.

"But it is going to take sort of a continuation of that trend and a little bit more time for the reserves to build up to a point where the tax rates can be lowered," said Bernie Kohn, a spokesman for the labor department.

jamie.smith.hopkins@baltsun.com

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