La. lawmakers move to halt business tax hike, seek another way to refill unemployment fund

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BATON ROUGE, La. (BRPROUD) — A Louisiana House panel agreed Monday that the state’s unemployment trust fund needs replenishing, but claimed that higher business taxes are not the way to fill it.

The House labor committee advanced legislation to halt an automatic $53 million tax increase on businesses. The tax was designed to take effect whenever the state refills its unemployment trust fund with federal loans, as what happens when that fund dips below $100 million — like it did this month. The idea was that the tax would help the state repay the federal government more quickly.

But House panel members claimed Monday that the pandemic has left businesses in no shape for more expenses. Republican lawmakers cite COVID-related restrictions on occupancy and operation.

“You add another tax on top of that, it could be catastrophic,” state Rep. Michael Echols (R-Monroe) said.

Statewide joblessness has shrunk trust fund’s size from $1.1 billion in March — during the pandemic’s infancy — to less than $100 million in October.

Exactly how lawmakers plan to repay the federal loans remains unclear. Lawmakers expect to revisit the matter in the spring, hoping another federal stimulus trickles down to state budgets.

State labor secretary Ava Dejoie urged legislators to keep the trust fund’s balance a priority.

“It’s like keeping the lights on,” Dejoie told legislators. “No one wants the lights turned off, right? You have to pay those things. Unemployment insurance benefits and maintaining a healthy unemployment insurance trust fund is one of the things that every state has to do.”

A Louisiana resident seeking work can collect up to $247 a week in unemployment insurance. That maximum payment remains the nation’s third lowest. A Democrat-led bill to make it $347 failed to attract the House labor panel Monday.

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