The Legislative Council takes no position with respect to the merits of the proposals. Background Unemployment compensation insurance is part of a state-federal program that provides benefits to unemployed individuals who meet the eligibility criteria. Benefits are paid from a fund supported by taxes on Colorado businesses.
Tax rates vary with each employer's benefit experience.
The state Division of Employment and Training sets unemployment compensation tax rates based on the tax rate schedules and the current balance in the unemployment compensation fund. The balance in the unemployment compensation fund fluctuates, the amount available being one factor that determines tax rates from the schedules. The primary result of these changes was an increase in taxes for some classes of employers. In January 1995 and January 1996, the fund balance was sufficient to reduce the tax rate for some employers. The state constitution limits state and local government spending and requires voter approval of any tax increases.