No businesses oppose NV unemployment insurance rate decrease
CARSON CITY, Nev. — Given that the Employment Security Division is planning to lower unemployment insurance tax rates, it probably wasn’t a surprise that no business owners showed up at a workshop on the proposal Wednesday, Oct. 23.
The workshop is held annually before the rates for the coming year are approved to give businesses a chance to comment and/or object.
Economist Jeremy Hays testified that Nevada’s UI Trust Fund now has more than $1.84 billion, the highest amount in state history. He said that’s enough to pay more than 17 months of benefits in a normal recession.
“Even under the worst case scenario, we have enough money to last just over a year,” he said.
Hays said Nevada’s economy is so strong that benefit payments are down to an average of just $23 million a month compared to more than $90 million during the depths of the recession just a few years ago.
It’s because of that economic health that the Employment Security Council recommended reducing the overall average tax rate two-tenths of a percent at its Oct. 3 meeting.
While that doesn’t sound like much, it would cut the total amount paid by more than 79,000 Nevada businesses by some $73 million next year.
The proposed rate will still generate some $600 million in tax revenue in 2020. After deducting projected unemployment benefit payments of $260 million, Hays said the remaining revenue would add $376 million to the Trust Fund unless a recession hits.
Without a recession, that would increase the total in the Trust Fund to more than $2 billion, enough money to cover a two-year normal recession.
Employment Security Administrator Kimberly Gaa is expected to adopt the new 1.65 percent rate at a Dec. 5 meeting. That new rate would take effect Jan. 1.
The news comes on the heels of a luxury home report from Nevada State Bank that showed in 2019, Northern Nevada’s high-value real estate market accounted for 418 home sales in 2019, an increase of 4.8 percent over 2018. The average luxury home price was over $1.8 million in 2019.