We are fortunate that unemployment rates currently are at an all time low. Unfortunately, the employment security agencies are still in business and need operating capital. Many expenses do not go away just because the unemployment rate is low. Further, states have to be prepared for the dips in the economy we know will come. The squeeze caused by the reduction in the allocation of administrative funds from the federal government has forced states to seek other resources.
States look to employers to make up differences through additional payroll taxes.
We don't believe this is appropriate since we are already paying too much in FUTA taxes. Employers want the state agencies to have adequate funds from the money we are paying today. Like anyone else, we also want to see a reduction in our tax costs. We believe H.R. 3684 will help on both counts. The main feature of H. R. 3684 is the establishment of state specific accounts for deposit of FUTA revenues.