March 25, 2005 - Unemployment tax

Aloha.

Thanks to Hawai`i’s booming economy, we enjoyed the lowest jobless rate in the nation for six of the last seven months.

Because so many people are working, nearly $400 million dollars has accumulated in the state’s unemployment insurance trust fund.

That amount is more than enough to maintain our yearly unemployment costs for the next three years.  My Administration wants to provide an immediate tax break by sharply reducing payments into that fund.

Hawai`i businesses currently pay the highest unemployment tax in the country.  Our companies are taxed on the first $32,300 of an employee’s wages.

That is simply not fair.

By lowering the taxable salary to $7,000, we would help businesses, their employees and the economy.  Instead of that money just sitting idle in state coffers, companies could use the savings for increased wages, added benefits and the creation of new jobs.

This measure deserves swift passage by the state legislature. Please ask your legislator to support this bill.

Mahalo. This Governor Linda Lingle.