State officials on Tuesday ordered a reduction in the tax rate businesses will have to pay for unemployment insurance.
The money goes into a trust fund to pay unemployment benefits to workers who lose their jobs. The amount varies from business to business.
With the fund projected to reach $511 million by September 2000 and a good economic outlook for the coming year, Employment Security officials agreed Tuesday that Nevada can cut the overall tax rate from 1.4 percent of taxable wages to 1.29 percent.
Labor Commissioner Stan Jones said projections show the state's overall unemployment rate will rise from 4.5 percent to 4.8 percent next year. He said Employment Security figures, however, show the fund will have an estimated $175 million more than needed.
"The forecast is that the Nevada economy will remain stable and continue to modestly grow, expand," he said.
Jones said the only time he remembers the rate being lower was when it was cut to 1 percent of taxable wages after the Legislature and governor passed the business tax in 1991.
The 1.29 percent is an overall rate. What an individual business pays depends on the number of employees in that business who collect unemployment benefits. The lowest tax rate paid by Nevada businesses is just a quarter-percent and an estimated 42 percent of the state's businesses fit in that category.
The highest rates, 5.4 percent, are paid by the businesses with the highest turnover and most ex-workers applying for unemployment benefits. Typically, officials say, that includes businesses like construction companies that hire and lay off workers seasonally.
In Nevada, eligible workers can get an unemployment check for up to 26 weeks. The average check is $208 a week, with the maximum about $275. The minimum is $16 a week.
Employment Security statistics indicate the average recipient collects unemployment 14 weeks.
Employment Security sets the tax rate annually. It must be paid by every business operating in Nevada but not by government agenies and some non-profit operations.
Jones said government agencies reimburse the fund for every dollar collected by eligible ex-workers.
