Posted by Clare S. Richie
For the second year in a row, Georgia will waste more than $20 million of taxpayer money cleaning up a mess created by more than a decade of irresponsible corporate tax breaks.
Corporate tax breaks and unprecedented tax holidays in the years leading up to the recession have drained more than $3 billion from the fund used to pay state unemployment benefits. This left the fund without the money needed to provide benefits to the people laid off during the recession. When the fund could no longer keep up with payments to unemployed Georgians in 2009, the state started borrowing from the federal government.
Today, Georgia still owes $650 million to the federal government, and as a result, must make annual interest payments until the loan is repaid.
In 2011, Georgia lawmakers paid $21 million in interest using your tax dollars, and on Sept. 30, 2012, another $22 million interest payment is due.
It’s ironic that state legislators have found more than $20 million to bail out employers, while making massive cuts to investments in education, health care, and services for the elderly, disabled and poor families.
Georgia isn’t the only state with an outstanding loan, but more than half of those other states are finding more responsible ways to make their interest payments. Financing the state unemployment trust fund is an employer responsibility, so it makes sense that other states, including Florida, are using a special employer assessment, rather than turning to taxpayers to make their interest payment.
Georgia has some of the lowest tax rates on employers to pay for unemployment insurance and offers some of the stingiest unemployment payments in the U.S. It’s time for Georgia’s employers to pay their fair share.