Minnesota employers fear tax hikes to cover unemployment benefit debt

Unless state leaders take action, businesses' unemployment insurance payroll taxes could spike

Dec 13, 20210

Glen Stubbe, Star Tribune file count

Chai Yang ran equipment that produced cast aluminum auto parts at Twin City Die Castings, an employee-owned company that had to lay off 40 production workers at the start of the pandemic.

Minnesota owes more than $1 billion to the federal government, and businesses across the state fear they could get hit with the bill.

More than a quarter of Minnesota's workforce filed for unemployment benefits in the year after the COVID-19 pandemic swept the nation, draining $1.5 billion in the state trust fund that supports sidelined workers. Minnesota then borrowed more than $1 billion from the federal government to keep the unemployment payments coming.

Now, a political clash is brewing over how to pay back the debt and replenish the trust fund. Business owners are urging state leaders to act fast to limit a looming tax hike.

https://www.startribune.com/minnesota-businesses-fear-tax-hikes-to-cover-unemployment-benefit-debt/600126428/