|
Getting your Trinity Audio player ready...
|
SACRAMENTO, Calif. (AP) — One potential consequence of California’s ballooning budget deficit: Higher taxes for businesses, with increases possible every year for the next decade.
Business owners pay a tax on each of their workers. The money goes into a fund that states use to pay unemployment benefits when people lose their jobs. During the coronavirus pandemic, so many people lost jobs that many of these funds ran out of money.
Twenty-two states borrowed from the federal government so they could keep paying unemployment benefits. Those states must pay that money back, plus interest. Most states have already done this. But California is one of five states that hasn’t. The state owes $18.9 billion.
If California doesn’t pay the money back, businesses have to do it through higher taxes. California was supposed to start paying off the debt this year with $1.5 billion — $1 billion toward the debt, plus another $500 million to help small businesses pay their increased taxes.
