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State poised to cut unemployment taxes

PIERRE -- Unemployment taxes would be cut an estimated $11.3 million in 2015 for South Dakota businesses under a proposal set for final approval in the Legislature.

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The Senate vote could come as early as Friday. The measure cleared a Senate committee Thursday and won approval in the House of Representatives 70-0 two weeks ago.

The bill, HB 1045, is proposed by the state Department of Labor and Regulation. It adjusts the rates in the table used for calculating the amounts that employers must pay into the system.

Labor Secretary Marcia Hultman said the target is a $78 million balance in the program's trust fund by the end of 2015. Without the legislation, the fund would accumulate an estimated $89.3 million by then, she said.

The fund went broke during the 2008-2010 recession. Rates were increased, temporary surcharges took effect and the department received a federal loan to get through the trouble.

Some of those emergency moves were rolled back as the fund got back into the black. The current legislation would complete the return to normalcy.

The trust fund would receive $47.6 million in business payments and interest during 2015 if the pending changes aren't made. The proposal would reduce that amount to $36.2 million.

David Owen, a member of the state's unemployment insurance advisory council, spoke in favor of the current legislation during a hearing Tuesday.

"These are proper adjustments to make," Owen said. He is president of the South Dakota Chamber of Commerce and Industry.

Shawn Lyons, executive director for the South Dakota Retailers Association, also serves on the council.

"It's good to see the trust fund back on solid ground," Lyons said. "We think it's a good step forward."

Support also came from Lindsey Riter-Rapp, representing the National Federation of Independent Businesses, Deb Mortenson for the Associated General Contractors highway and heavy construction chapter, and Julie Johnson for Absolutely Aberdeen.

"I think this will work. I think this will relieve some of the pressure that was added to some of our employers when the trust fund was in trouble," Mortenson said.

Johnson was state secretary of labor in the Janklow administration during the 1980s. "This is a very important bill to South Dakota," she said.