Here's the problem: For three years running, the State of California has failed to pay back loans that it took from the IRS to fund state unemployment tax liabilities timely, causing a supplemental unemployment tax to be due. This supplemental tax is paid by every employer in the state that is eligible (gee, thanks a lot) to pay State Unemployment Tax, abbreviated SUI (note the one-to-one correspondence of this bureaucratic acronym with the first three letters of a word meaning intentional, self-inflicted death.) The latin word "sui," and also the French word, means "himself/herself/itself. Thus, in my way of thinking, etymologically and linguistically, State of California SUI is basically short for state suicide.
Ever contemptuous of taxpaying businesses, State of CA legislators have continued to dole-out SUI "benefits" to the state's unemployed at a rate exceeding the state's ability to pay said benefits. To make up the shortfall, the State of CA borrows from the federal government, and then, fails to pay the money back timely. No problem! California employers will make up the difference! It's the right thing to do!
No, it's not the right thing to do, and the practice of foisting the bad consequences of legislative failure onto the backs and bank accounts of California employers must stop. To this end, I recently mailed letters (yes, I wrote real letters) to my California 26th District State Senator, Ben Allen, and my California 54th District Assemblymember, Sebastian Ridley-Thomas. Following is the content of one such letter:
January 7, 2017
Assemblymember Sebastian Ridley-Thomas
Sacramento, CA 94249-0054
Dear Assemblymember Ridley-Thomas:
I am writing to alert you to the great disservice that the State of California Legislature is doing by continuing to draw emergency loans from the federal government to cover the State’s underfunded unemployment insurance (UI) account, and then default on repayment of these loans. Three years in a row, the State Legislature has forced the financial consequences of its mismanagement of the State’s UI program upon California business owners.
I have attached copies of notices that two of my State of CA S-corporations have received from ADP, my payroll processing company, regarding additional (FUTA) Federal Unemployment Taxes to be withdrawn from my business checking accounts on January 24, 2017, because of the State’s default on its FUTA loans.
Assemblymember Ridley-Thomas, as your constituent, I ask you to stop the incompetence and ideologically influenced mismanagement of California’s UI program. Stop extending UI benefits the State and taxpayers cannot afford.
William L. Robbins
Founder & President