Legislature again stops business tax hike for unemployment trust fund

Louisiana lawmakers have agreed to keep the rules governing the state’s unemployment trust fund static, avoiding the increase in business taxes and the drop in jobless benefits that would have otherwise been triggered by the draining of the trust fund.

The unemployment fund is nearly bankrupt after more than a year of payments to workers forced out of their jobs by the coronavirus pandemic. Louisiana has borrowed about $200 million from the federal government to keep unemployment benefits flowing.

To refill the fund, state law requires tax hikes on businesses and a decline in benefits for jobless workers who receive some of the lowest unemployment payments in the nation. Lawmakers last year delayed those provisions from taking effect for a year, saying the changes were inappropriate amid an economic recovery.

Three measures by Sen. Mike Reese, R-Leesville, SCR3, SCR5 and SB89, will continue that suspension for another year. The final pieces won final passage Wednesday in a 33-0 Senate vote and a 94-0 House vote.

The move will keep unemployment benefits at a maximum of $247 per week and save businesses millions in taxes.

Meanwhile, lawmakers are poised to steer federal coronavirus aid to both pay off the debt and pour as much as $300 million into the unemployment trust fund in hopes of getting it on better financial footing.