Posted on 06/16/2010 3:48:54 PM PDT by Qbert
SANTA FE, N.M. (AP) - Businesses in New Mexico will pay higher taxes starting in January to shore up the program that provides jobless benefits, but a top state official warns that another tax increase probably will be needed next year to keep the unemployment program solvent. Workforce Solutions Secretary Ken Ortiz said the agency expects the unemployment fund will run out of money in late 2011 if the economy remains weak and there's little change in the number of jobless New Mexicans.
"Based on the amount we're paying out, compared to what we're bringing in, I project some sort of tax increase," Ortiz said Monday in a telephone interview.
How to rebuild the unemployment fund could be among the early political challenges confronting New Mexico's next governor, who takes office in January.
The unemployment fund is expected to have a balance of $110 million in January. Employers will pay about $155 million into the fund through taxes but the state expects to spend about $312 million on benefits next year for those without jobs.
New Mexico's fund is being drained because of high unemployment—8.7 percent in April compared with 6.6 percent a year ago.
Ortiz said it's uncertain the size of the tax increase the department will propose. The Legislature and the governor will make the final decision. Lawmakers convene in January for a 60-day session.
However, if nothing is done and the unemployment fund runs out of money, then businesses are guaranteed to face a hefty tax increase.
New Mexico will have to borrow money from the federal government to pay jobless benefits if the state's unemployment fund becomes insolvent. Once that happens, Ortiz said, taxes on employers jump to the highest rate under state law to replenish the fund and repay the loan with interest.
(Excerpt) Read more at breitbart.com ...
Just raise tax on the rich. Problem solved.
And then watch the exodus of small-businesses out of NM.
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