Two years ago this month, Governor Walz ordered many businesses to close due to COVID. Restaurants and bars were shut down, along with fitness centers, and dentists were seeing only emergency patients. The unemployment rate in Anoka County climbed to nearly ten percent. A flood of workers needing help filed for unemployment benefits.
“The fund was depleted during the pandemic, it was used for what it was created for which was to support workers who are unemployed and need benefits,” said Metro North Chamber President Lori Higgins. “Most states have used their federal relief funds to replenish the fund. The state of Minnesota chose not to do that so we are still at a deficit.”
To make up the shortfall, higher unemployment insurance taxes are going up an average of 30 percent, but some are much higher.
“This was completely preventable,” said Higgins.
In a letter to the Star Tribune, she urged the legislature to act and use some of the surplus to replenish the fund before the higher rates went into effect on March 15. That didn’t happen.
“So that means the higher taxation rates now go into effect, which is huge for businesses. It’s a massive increase,” said Higgins. “Being that we’re now in tax season, businesses are now prepared to pay their taxes so unless something is fixed right away, they will continue to have this hit to their bottom line.”
The State Senate passed legislation with bi-partisan support in February, but the House did not, choosing to wait until bonus pay for frontline workers during the pandemic gets approved.
“If you were willing to work with us on an agreement to help frontline workers, we could pass that bill anytime you want,” said Rep. Ryan Winkler, DFL of Golden Valley.
Higgins says tying separate issues together is nothing new in politics, but it shouldn’t happen when there’s a deadline.
“The problem is when you have something with such a time sensitive deadline when you have a problem that could be fixed, it just makes people even more dis-enfranchised with what’s happening at the capitol when they tie issues together that shouldn’t be tied together.”
The tax increase could be un-done, but that could be complicated and expensive. Higgins says business interests will continue to work with the legislature on the unemployment fund.
