(The Center Square) – Louisiana Gov. John Bel Edwards has asked the state’s congressional delegation to try to ensure the federal government’s next stimulus and aid package includes shoring up states’ unemployment trust funds so tax increases aren’t imposed on businesses.
Louisiana’s fund could be insolvent by September, officials said, forcing the state to borrow from the federal government in order to pay benefits.
When the state’s fund gets close to running out of money, the amount of wages the state taxes to pay for benefits increases, effectively raising taxes on employers. If the trust fund falls below a balance of $100 million, Louisiana law mandates that the Louisiana Workforce Commission impose a surtax on businesses of up to 30 percent on taxable payroll, Edwards says.
“This is obviously not a good time to be imposing any additional taxes or surcharges on employers and their payroll,” he said.
Louisiana and other U.S. states have seen unemployment claims skyrocket after business restrictions were put in place to slow the spread of COVID-19. Business groups have called for Edwards to lift restrictions, citing the economic damage.
Edwards said Louisiana’s unemployment system is not set up to deliver varying benefit amounts tied to a person’ previous income, as some U.S. Senate Republicans have proposed. He also hopes the federal government will again offer enhanced unemployment benefits and said he expects Congress will end up providing something between the $600 weekly enhancement that House Democrats support and the $200 Senate Republicans have proposed.
The $600 weekly federal unemployment enhancement approved by Congress in late March through the CARES Act expires Friday. U.S. Treasury Secretary Steve Mnuchin and many Republicans said the $600 in additional weekly benefits discouraged many workers from returning to their jobs because they made more off unemployment.
Also Tuesday, Edwards said Louisiana now has more COVID-19 cases per capita than any other state, though the number of people hospitalized with the illness caused by the new coronavirus has plateaued over the past six days, which is “hopefully the beginning of a trend.”
Hospitalizations previously had been increasing, and some health officials had worried about the potential strain on hospitals.
As of noon Tuesday, at least 3,700 Louisiana residents had died from COVID-19, state health officials reported. Officials reported 1,125 new cases, bringing the total number of confirmed cases since the beginning of the pandemic to 111,038; officials believe 61,456 of those patients have recovered. There were 1,583 COVID patients in hospitals and 214 of them were on ventilators.
David Jacobs, Staff Reporter for the Center Square, is a Baton Rouge-based award-winning journalist who has written about government, politics, business, and culture in Louisiana for almost 15 years. He joined The Center Square in 2018.