Candidate Notes on 01-SGA7

01-SGA7 on Feb 27, 2001

• Whereas, the Federal Unemployment Tax Act (FUTA) was enacted over 60 years ago to guarantee financing for a national employment security system’s federal-state partnership; and,
• Whereas, the “temporary surtax” of 0.2%, enacted in 1976, is still being collected today despite a $24 billion surplus in the trust funds; and,
• Whereas, over the past several years, the return of taxes paid from states to fund important employment services has decreased to an average of only 51%, with some states receiving back as little as 32%, causing them to raise taxes to compensate for the unutilized federal funds; and

Whereas, over the same period, the ability of states to fund essential unemployment insurance and employment services has suffered; and,

Whereas, states are better equipped to collect the employer-paid tax and to provide local services to its unemployed citizens; now, therefore, be it

Resolved, that the Southern Governors’Association calls on the United States Congress and President to pass employment security financing reform which includes repealing the FUTA surtax, increasing state flexibility and eliminating inefficiencies in FUTA tax collection while maintaining the trust funds on the unified budget.