XPost: sac.politics, alt.business, talk.politics.guns   
   XPost: alt.fan.rush-limbaugh, alt.politics.democrats   
   From: stupid.voters@california.com   
      
   SACRAMENTO, Calif. — Businesses across California are now paying more on   
   their payroll taxes to the federal government because of spending   
   decisions the state's legislature and governor made within the last   
   couple of years.   
      
   The state failed to repay on time its $20 billion loan from the federal   
   government that helped with California's unemployment costs during the   
   pandemic. The state forced businesses to close during COVID-19, leaving   
   many jobless and in need of unemployment pay. State officials have said   
   California ended up paying more than $200 billion in benefits, more than   
   $32 billion of which was the subject of fraud.   
      
   California is one of two states (the other New York), that did not pay   
   back the loan with the stimulus money it had received from the federal   
   government. California received $27 billion in stimulus, but state   
   leaders opted to keep it and spend it on other items at a time when they   
   boasted about the state's nearly $100 billion budget surplus. In 2023,   
   the state faced a budget deficit in the tens of billions of dollars and   
   then was met with the same hurdle in 2024.   
      
   Since the state did not pay back the debt within two years, federal law   
   requires the state's employers to step in and pay up. As of now, each   
   employer, regardless of the number of employees they have and whether   
   they are part or full-time, will pay an extra $21 dollars per employee   
   on their payroll taxes. In 2026, the extra amount will increase to $42,   
   in 2027 to $63, and increase another $21 per employee every year until   
   it's paid off.   
      
   Employers across the state within the last several weeks have received   
   notices from their payroll companies, alerting them of their new costs   
   as a result of the state's decisions. Some told KCRA 3 they were   
   blindsided by the amount of money taken out of their bank accounts.   
      
   "I feel like it's an email I would have normally dragged into my trash,   
   but I clicked on it and it said we will be deducting this in early   
   January of 2025," said Becca Kenyon Westfall, the owner of CycleLife, a   
   cycling and fitness studio with locations in Sacramento, El Dorado Hills   
   and Rocklin. She said with 32 employees, the costs amounted to $2,100   
   from her payroll.   
      
   "That's definitely an amount I was not planning on paying," she said in   
   an interview with KCRA 3. "This just feels like a gut punch after   
   everything else COVID has done to us. It's frustrating."   
      
   Chef Andrew Gruel, a restaurant owner based in Southern California with   
   a popular social media presence, posted about his similar situation on X.   
      
   "Our hours went down, but our payroll went up $2,000, and I said, 'that   
   doesn't make any sense,'" Gruel told KCRA 3 in an interview.   
   "Restaurants don't have thousands of dollars sitting around because we   
   have perishable inventory."   
      
   "If I knew there was $2,000 that was going to be taken out of our   
   payroll, I wouldn't buy futures into some of my seafood. I would've kept   
   more cash in the bank accounts because I always want that cash for   
   emergencies," he said.   
      
   "The state has never paid any money towards the principal, nor has it   
   created any sort of credit or benefit for smaller businesses facing this   
   significant federal tax hike," said McGeorge School of Law Professor and   
   long-time California lobbyist, Chris Micheli.   
      
   Micheli noted lawmakers and the governor first approved but then   
   prevented a state tax credit from going into effect in 2023 that would   
   have helped cover the costs for some employers.   
      
   "Every employer, no matter the size or type of business, face this   
   increase each and every year until that 21 billion is paid back, it’s   
   all on the shoulders of the employers," Micheli said, noting even   
   businesses that opened after the pandemic are subject to the higher taxes.   
      
   "That amount of money is unfathomable, I wish they’d be a little more   
   responsible with our tax dollars," Westfall said.   
      
   "This has been an issue for many, many years," Gov. Gavin Newsom told   
   reporters in Redding on Monday. He claimed he tried to put billions   
   toward the debt, and blamed the legislature for taking the money out of   
   the budget.   
      
   "We'll continue to make the case with the legislature and the imperative   
   and importance of paying down this," he said. "It’s an obligation we   
   have, to pay it down. We just want to make sure we don’t do it on the   
   backs of employers as it results to the payroll tax, obviously that's a   
   point of concern."   
      
   State leaders have suggested the debt is the consequence of California's   
   overall broken unemployment insurance system. Experts have said the   
   state was in a similar situation after the last recession. A recent   
   report from the California Budget and Policy Center notes the system for   
   years has been severely underfunded and outdated.   
      
   "This has been an ongoing issue that the Legislature tried to tackle as   
   part of past budgets, and we’ll continue to work on mitigating the   
   immediate impacts of the federal UI tax increases, particularly for   
   small businesses and non-profits, who are the heart of our economy,"   
   Senate Pro Tem Mike McGuire said in a statement. "As we work to make   
   California more affordable, we look forward to working with the Speaker   
   and Governor to craft long-term reforms that protect workers and lower   
   the long-term tax burden on small businesses and non-profit organizations."   
      
   A spokesman for Assembly Speaker Robert Rivas said, "This is a   
   decades-old problem, so a lasting solution will require deep compromise   
   between business and employees, and perhaps commission oversight. The   
   Speaker’s priorities are clear: We must reduce economic uncertainty for   
   our small business owners and always protect working-class families."   
      
   California's Legislative Analyst's Office projected the state will see a   
   small budget deficit this upcoming year of about $2 billion. In a recent   
   analysis of the state's unemployment insurance system, the LAO said the   
   state's annual budget shortfalls could balloon the outstanding federal debt.   
      
   Among its suggestions to fix the system, the LAO has recommended the   
   legislature significantly increase the taxable wage base from $7,000 to   
   $46,800, which the office notes would tie the base to the amount of   
   benefits a worker can actually get per week, which is $450. But the   
   office said this step alone won't solve all of the problems.   
      
   The LAO also recommended the legislature refinance the loan that   
   involves both the state and businesses sharing the burden.   
      
   https://www.kcra.com/article/california-businesses-unemployment-   
   ebt-payroll-taxes/63253231   
      
   --- SoupGate-DOS v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)