Posts Tagged ‘Cindy Jones’

State Panel Recommends No Change In Unemployment Insurance Tax Rate

By Sean Whaley | 5:15 pm October 4th, 2011

CARSON CITY – Despite the need to borrow $773 million from the federal government to pay jobless benefits so far in the current economic downturn, an advisory panel today recommended that the average tax rate levied on Nevada employers to pay claims remain unchanged at 2 percent for 2012.

The unanimous vote of the nine-member Nevada Employment Security Council came despite the recommendation from one employer representative for an increase in the rate to 2.5 percent or even 2.75 percent so Nevada could pay off its federal loans more quickly.

Ray Bacon, executive director of the Nevada Manufacturers Association and the only employer representative to testify at the hearing, recommended the increase despite the difficult economic situation in Nevada.

Ray Bacon, executive director of the Nevada Manufacturers Association, argued for a higher average tax rate. / Photo: Sean Whaley, Nevada News Bureau.

“As we have done in the past, we think that the best remedy for employers is to bring some level of stability to this thing so that we don’t wind up with a rate increase year after year after year and that we get out of from under the federal thumb as fast as reasonable, not as fast as possible,” he said.

Nevada’s unemployment tax rate is low compared to other states, Bacon said.

The 2 percent rate would bring in an estimated $438 million to pay jobless claims. A 2.75 percent rate would bring in just over $600 million.

Leaving the rate at 2 percent means the federal loans, for which interest is being charged that must be paid out of the state’s general fund, won’t be paid off until 2018. A 2.75 percent average tax rate would see the loans paid off in 2016.

But the few members of the council who commented during the meeting expressed concern about the effect of a tax rate increase on job creation efforts.

Bill Anderson, chief economist for the Research and Analysis Bureau of the Department of Employment, Training and Rehabilitation, said Nevada’s job losses have been severe.

“We’ve lost, since the official start of the recession, about 190,000 jobs here in Nevada,” he said.

Cindy Jones, administrator of the Employment Security Division, said it has been the practice in Nevada to increase the tax rate during times of economic health, allowing for the creation of a reserve to pay benefits in tough times.

After listening to two hours of testimony on jobless rates and what different tax rates would do to help pay down the federal loans, Paul Havas, chairman of the panel, recommended to keep the average rate the same.

Cindy Jones, administrator of the Employment Security Division, and Paul Havas, chairman of the council, listen to testimony today. / Photo: Sean Whaley, Nevada News Bureau

The rates employers actually pay vary based on a rating system assessing the risk of layoffs. Those rates range from 0.25 percent to 5.4 percent. New employers not yet assessed a risk would pay 2.95 percent. The tax rates will be assessed on the first $26,400 in an employees’ wages.

The recommendation of the council will be used by Jones to formally set the rate for 2012 later this year.

The 2011 average tax rate was increased last year, from 1.33 percent to 2 percent. The new rate will take effect on Jan. 1.

There was a bit of good news reported to the council by Jones during the meeting. Nevada is the only state in the nation that received a nine-month extension on its first interest payment to the federal government that had been due on Sept. 30, she said.

Nevada won’t have to make its payment, estimated now at $22.5 million, until June 30, 2012, Jones said. The reason for the delay is Nevada’s worst-in-the-nation unemployment rate, she said. Nevada is the only state that had a 12-month jobless average that exceeded 13.5 percent, allowing for the extension.

“So unfortunately we had that high unemployment rate,” she said. “I’m very hopeful that we do not qualify next year. I really don’t want the state to endure that sort of unemployment level for the next year in order to qualify for that mere nine-month deferral.”

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Audio clips:

Ray Bacon of the Nevada Manufacturers Association argued for a higher rate to pay off the federal loans more quickly:

100411Bacon :18 fast as possible.”

Nevada state economist Bill Anderson says the state has lost about have the jobs created in the 10-year boom that ended in 2007:

100411Anderson :25 what we gained.”

 

Employment Training Contracts Worth Nearly $24 Million Approved By State Board

By Sean Whaley | 4:33 pm July 20th, 2011

CARSON CITY – The state Board of Examiners today approved contracts worth nearly $24 million in federal funds to provide employment and training services to job seekers as Nevada continues to lead the nation in unemployment.

The contracts were approved by Gov. Brian Sandoval and Secretary of State Ross Miller after Sandoval received assurances that the two contracts for Nevadaworks in northern Nevada would be managed consistent with any findings in an audit of the workforce investment board now under way.

Cindy Jones, administrator of the state Employment Security Division, assured Sandoval that the money would be expended by Nevadaworks in compliance with federal and state rules.

Cindy Jones of the Employment Security Division responds to questions about job training contracts today at a Board of Examiners meeting. / Photo: Sean Whaley, Nevada News Bureau

The three Nevadaworks contracts approved by the board are worth $6.8 million. The three contracts with Workforce Connections in southern Nevada are worth $16.9 million.

After the meeting, Jones said there is an audit under way of Nevadaworks as part of the Department of Employment, Training and Rehabilitation’s normal oversight of the contracts. The review is being performed by the state Division of Internal Audits. The audit is not complete and no findings are yet publicly available for review.

The funds are used to train jobless Nevadans for new types of work where there is demand, as well as provide everything from work boots to child care subsidies to assist people in securing a job.

The approval of the contracts comes as Nevada continues to borrow money from the federal government to pay unemployment benefits.

Jones said the state has borrowed $775 million from the federal government to date to pay benefits. The first interest payment of $29.1 million on that borrowed money is due in September. The state has allocated $64 million to make the interest payments over the two years of the current budget.

The state will not be able to repay the federal loans in the near term, she said. Nevada, like more than 30 other states, is continuing to borrow from the federal government to pay benefits, Jones said.

The agency this fall will review the status of the state’s unemployment trust fund, which is funded with a tax on employer payrolls, to assess what the tax rate for calendar year 2012 will be, Jones said.

Nevada employers this year are paying on average a tax rate of 2 percent on the first $26,600 of each employee’s wages. The 2010 rate was 1.33 percent. But the $410 million in revenue projected from the higher tax rate this year is still not enough to pay benefits and begin repaying the federal loan.

And while the federal loans were interest free for the first two years, those payments must be made beginning this year unless Congress takes some action to extend the grace period, Jones said.

Jones said she does not yet know what course the Employment Security Council will take with regard to the 2012 tax rate when it meets in October.

Nevada’s jobless rate was 12.1 percent in May, down from its peak of 14.9 percent but still highest in the nation.

Audio clips:

Cindy Jones, administrator of the state Employment Security Division, says the audits are a regular part of the agency’s oversight of the funds:

072011Jones1 :24 to our constituents.”