The California Unemployment Insurance Fund is now broke, due to the large number of unemployed and laid-off workers filing claims.
The state must now borrow funds from the federal government in order to continue paying benefits.
And while the state is doing the borrowing, it will be businesses large and small that will bare the brunt of repaying the billions of dollars borrowed, and the interest on the loans.
Already reeling from the strain of the slowing economy, as more and more customers cut back, either because they are afraid or have lost their job, this latest potential blow to the bottom line could be too much for some businesses to overcome.
State officials should keep in mind that overly burdening businesses, especially the small businesses where most new jobs are created, could cause more layoffs and speed up more business closings at a time when we need to keep them alive.
State officials would be foolish to not take this into consideration when they go about determining how much of an added tax burden businesses should be forced to take on.
With California’s unemployment rate now over nine percent and growing, we don’t need to add to those numbers if we can help it.