Unemployment insurance costs could rocket in Md.; Governor's proposal to limit business impact not universally praised
Employers might grumble about state unemployment insurance taxes whenever they do their books, but the fees make headlines only when there's a problem -- and there is a serious one in Maryland, business owners say.</br></br>Battle lines were drawn Thursday in what promises to be one of the first and most contentious battles when Maryland's General Assembly reconvenes in Annapolis next month.</br></br>Unemployment insurance costs for Maryland business owners are slated to jump 267 percent from $51 for each employee to $187 per employee annually under a law intended to keep the state's unemployment insurance fund from going bankrupt as early as March. The fund has a balance of about $200 million, but the state has been forced to pay as much as $24 million weekly, or twice as much as usual, to cover unemployment claims. The fund won't receive enough new money to keep it solvent until tax returns are filed in April.</br></br>Gov. Martin O'Malley on Thursday released a package of proposals his administration said would keep the fund in the black until then, and limit employers' new costs to $153 annually for one employee. He said his plan would reduce penalties for business owners to pay the tax over time through payment plans.</br></br>O'Malley would accomplish that largely by bowing to changes that Congress and President Obama want states to make in unemployment insurance systems. For Maryland, those changes would mean $127 million in federal stimulus funding.