ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, January 7, 1997 TAG: 9701070093
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
Virginia businesses should get a $100 million tax cut because the state's unemployment insurance trust fund has grown too large, two groups that support limited government said Monday.
According to a study by the Virginia Institute for Public Policy and the Southeastern Legal Foundation, the trust fund has a balance of more than $852 million. That's enough to pay unemployment benefits at current rates for four years.
The fund is maintained by a tax on employers that can vary from 0.1 percent to 6.2 percent of the first $8,000 of each employee's income.
The institute wants the General Assembly to slow the growth rate by passing a one-time $100 million tax cut. Employers' taxes would be cut 40 percent for one year.
``Last year, the trust fund grew by $107 million in excess of what was needed to pay benefits to the unemployed,'' said John Taylor, president of the Virginia Institute for Public Policy. ``Our proposal will not deplete the fund, but it will keep it from growing from year to year.''
Taylor said the money now is invested in U.S. Treasury bills.
Four state senators joined Taylor at a news conference announcing the proposal: Charles Colgan, D-Manassas; Stephen Martin, R-Chesterfield County; Jack Reasor, D-Bluefield; and Walter Stosch, R-Richmond.
``I'm certainly in favor of analyzing it, and if it is overfunded then providing tax cuts to employers,'' said Stosch. He added that it was still too early to tell how large a cut, if any, employers should receive.
Unions said they would oppose any reduction in the level of contributions because it could hurt workers now receiving unemployment benefits.
LENGTH: Short : 40 linesby CNB