Alaska’s businesses are being notified today they’re being hit with an increase in unemployment insurance rates, even while the state’s unemployment rate itself is dropping and the unemployment insurance trust fund holds $234 million.
“It is ludicrous to require Alaskans to pay more for unemployment insurance when the UI fund is clearly solvent,” said Gov. Sean Parnell Monday as he proposed new legislation to make a reduction possible.
The governor said the laws governing the unemployment insurance program requiring both additional payments into the trust fund and rate increases next year need revision.
The increase is estimated to cost Alaska employers and employees an additional $68 million in 2012, according to the Department of Labor & Workforce Development.
The rates vary among employers and industry, based on the likelihood of benefits being paid.
Parnell said Monday that he’s directed Attorney General John Burns and Department of Labor Commissioner Click Bishop to recommend changes to the law that will allow reduced payments into the fund as long as it remains solvent.
That will take new action by the Alaska Legislature, he said.
Sen. Dennis Egan, D-Juneau, called next year’s scheduled rate increase “crazy,” and said the Legislature would likely be receptive to changes to keep it from happening.
“To have to contribute more money when we have a surplus trust balance doesn’t make any sense to me,” Egan said.
Egan chairs the Senate’s Labor and Commerce Committee, where any such legislation would likely be referred.
The Department of Labor on Friday and Monday mailed out unemployment insurance premium information for next year to business owners notifying them of the increase, said Beth Leschper, spokeswoman for the department.
Parnell is sending business owners a letter they should get in the next day or two that will inform them of his intent for changes to limit the rate impact, said Sharon Leighow, Parnell’s press secretary.
“I intend to ask legislators to join me in providing payroll tax relief to employers and employees in the state,” Parnell tells business owners in the letter.
The current unemployment insurance law, he said, provides the state with no flexibility and mandates the state “pile on” with additional costs at a time when people are already struggling to make ends meet.
While many states’ unemployment insurance trust funds are struggling or bankrupt, with California and Michigan particularly hard hit, Alaska’s is maintaining a surplus, according to the Department of Labor.
One reason may be that while unemployment has risen in recent years in Alaska along with the nation, it has risen much less here than elsewhere. At the same time, employment in the state hit a new record of 355,000 this year, even as most other states saw declines.
• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.





Comments (18)
Add commentMaybe if Parnell wasn't off politicking in Florida
He would have known that his own Department was mailing off letters announcing an UI increase, and sent his letter BEFORE the DOL letter hit the mailboxes.
Don't...
Don't let any of the Third World States, California, Oregon, etc, know that we have any extra money... California might come after the money to pay for illegal immigrants schooling and Oregon might use it to fund their "certified gas pumper" program.
@wren: apparently you are not
@wren: apparently you are not aware that California is the country's largest state in terms of GDP, and something like the 8th largest economy in the world all by itself.
Third world indeed (which is silly, anyways, as the third world refers to countries aligned with neither NATO and its allies, the first world, or the USSR and its allies, the second world).
Lining up...
...more campaign donations from the cruise industry was he?
PP are you suggesting that
PP are you suggesting that the land of fruits, & nuts, i.e. California, is not going bankrupt?
The cost of workers comp is ONE OF the biggest impediments to work force expansion a small business faces.
substance
where the substance in this story. For the specific of whose rates are going to go up is fairly important information. All employers do not pay the same rate. It is based on what is generally refereed to as the experience factor for an industry group. Without specifics as to what industry group is going to pay more based on the UI claims of that group what we have is a complaint of the governor and a politician without any information on whose going to be affected.
For example if the increase is based on an increase in the number of individuals in the retail sales (tourist shops) collecting higher benefits for a longer time then perhpas those employers contribution need adjustment. The UI contribution rate for employers is not the same for all employers.
As I said there is a lot of politics being bantered about at this time with little supporting information.
...and, they tax the benefits!
If you buy car insurance, then total your car, you get a check from your insurance company. That check is not taxed.
But if you are employed in Alaska, you and your employer share the insurance premium. And if you become unemployed, you (usually) receive a check...and it IS taxed!
And the irony is, it is taxed at the self-employment rate of 35%-40% even though you are unemployed! How can someone be unemployed and still receive a 1099?!?!?
If anyone needs a tax break, it is the unemployed. But as we have seen, tax breaks usually go to the rich only, not to those who really need it.
I am also curious if the increase is mere pennies for employers, or if it is substantial. The Empire didn't mention this.
END TAXES ON UNEMPLOYMENT INSURANCE BENEFITS!
PP...
Yes, you are correct. California does have the largest GDP. On the other hand, the idiots try to give people living in their state illegally educational benefits to go to college. They let illegal immigrants file workers comp claims, a fund to which they never contributed a penny. They tax businesses right out of their state. They aren't "an" example of social welfare, they are "the" example of social welfare.
It doesn't matter what your GDP is, what matters is, can support your own social programs without begging for money from the fed. And I really find it unfair that even a penny of my tax dollars going to the fed to pay for California to send their illegal aliens to go to college. Sure, it's not direct money. It's called assistance or bailout or whatever. It might fund a non-welfare program, but California can then divert money from that program to pay for their social programs.
The reason the Alaska Trust Fund has remained solvent...
is due to adherence to a formula that keeps it so. That formula identifies the tax rate increase necessary to maintain that solvency. It's called laying away enough for the future and for hard times - times that appear to be continuing. This is the common sense that has kept Alaska's fund solvent. To use words like "ludicrous" and "crazy" reveals the lack of knowledge on this subject by both the Gov and Dennis and it is unfortunate they didn't do a little homework before going for the headline..
@ wren
Ignorance is more expensive to society in the long run than education.
I have no problem with my tax dollars going to educate anyone who needs it, unless those tax dollars are going for "merit based" scholarships to rich kids whose college education was paid for by a trust fund while they were still in diapers.
Think about it...
If we pay to educate illegal aliens, they get jobs, pay taxes and they add to the economy.
If we deny education to anyone, they remain on welfare for life because they have no skills that will get them a job.
But republipukes never believe in education which is why they always want to slash it. Look at Rick Perry for example! He wants to do away with the Department of Education!
As for merit based scholarships which our Governor promotes, this is not fair. Some kids will breeze through high school with straight As with no effort whatsoever, while someone else who studies his butt off will only receive Bs or Cs across the board. Let's not reward someone simply because they are brighter than someone else. Let's offer the opportunity of education equally to everyone, and let's offer scholarships to those who can least afford an education, not someone who is naturally gifted whose education is already paid for.
Alaska needs doctors AND car mechanics, not just doctors.
OMG, Jo
Seriously? You think we should offer university equally to everyone, not just those who are bright enough to make the best use of that limited resource?
Yes, Alaska needs doctors AND car mechanics. Car mechanics don't need university resources to teach them their craft. Doctors do.
Also, I believe you fail to distinguish between education and career training. Both can be readily obtained without ever setting a foot on campus.
@PeytonPlaceAK: how is a
@PeytonPlaceAK: how is a university education a limited resource? We can certainly pack more people into those rooms.
A college education benefits you in far subtler ways than just getting a job (unless you got a business degree). College education shouldn't just be free to every American, but mandatory.
Think about it. We all vote, and an informed electorate is a functional electorate. A more educated person will be able to apply their knowledge in many places throughout their life, whether it be as simple and insignificant as getting a Samuel Coleridge reference in a movie to something as important as seeing through the lies of a politician or a car salesman or a sensational headline in the news.
It also exposes people to what's out there. How many people miss out on more rewarding career paths because they weren't exposed to them or because of lack of opportunity?
Let's educate everyone, be ambitious, better ourselves for its own sake. Refuse to accept ignorance, mediocrity, or personal stagnation.
"If they knew better...
...they would do better." Education is simply turning on a light in a dark room. (This little light of mine...)
@ Peyton Place
I never said to make 'university education' available to everyone, I simply said 'education.' Not everyone is destined for university education.
Trade schools, correspondence classes, universities and grad schools are all under the umbrella of "education."
But, having said that, I am in favor of offering the OPPORTUNITY of a university education (or any other education) to anyone who feels they can handle it. If they can't handle it, their test scores will weed them out of the process. So will the SAT. But at least offer them the opportunity. If they don't pass an SAT, then they wouldn't get a scholarship since they can't get into college. But if they do pass the SAT and get into college, give them a scholarship if they financially need it.
But everyone deserves the opportunity if they want it, not just kids of the 1%. It is incredibly difficult and expensive for the kids of middle class to attend college. Trust me. I was one of them.
@ Jo
You should go back to college. Rick Perry is looking to kill the Dept. of Education because it's a worthless department. Do some reading on its history. Schooling took place long before the Dept. of Education existed. In fact, it was only formed for research and make sure there was equal opportunity across the board. Now they are a huge beaurocracy. And worthless at that.
Also, if we pay to educate illegal aliens, we have another non-paying illegal alien with an education. No, that didn't benefit anyone except the illegal alien. If they aren't legal, don't use my tax dollars to educate them. I don't see them putting money in the pot so that my kids can go to school on the government.
A little off subject,
aren't we?
Off topic much?
Wolfmagic is the only one to actually get to the point, which is that the program works. Saving ahead and not running deficits when the time comes? Isn't that the very complaint we have on SS? Governator poonell and Egan show an utter lack of imagination AND contempt for every reader that has an ounce of fiscal sense.
Run things into the ground and be shocked when we see how we no longer control our own paths? No thanks.
Missed you so much Madison, especially your prompt ability to thoughtfully discuss ESC. Oops, you wandered off to WC land didnt you ;)