OCR Text |
Show Upward Trend Of 50 Recorded In State Unemployment Compensation Payments During 1949, Study Reveals Unemployment compensation payments in Utah reached a record rec-ord high in 1949 it was noted in a Utah Foundation research report released today. Benefits totaled $5,060,709, 50 per cent more than in either 1947 or 1948, and a million dollars in excess of the previous high in 1946- Analyzing the operation of the experience rating' plan adopted in Utah in' 1947, the Foundation Founda-tion study reports that taxes paid by employers to finance unemployment compensation have substantially exceeded the cost of the program in every year since its beginning until 1949. The surplus has accumulated accumu-lated as a reserve fund with a balance of $33,592,000 at the close of 1948. Utah was among the last of the 48 states to adopt an experience ex-perience rating plan to reduce employer taxes, which pay the entire cost of unemployment compensation, to an amount no greater than necessary to maintain main-tain a reasonable reserve fund and finance the program. Under Utah's payroll variation varia-tion plan' of experience rating, the tax rates of covered employers employ-ers were reduced so that the average av-erage rate for all covered employers em-ployers in 1949 was 1.06 per cent, compared with 2.7 per cent prior to the effective date of the plan. The Utah law provides for restoring higher tax rates upon employers if the reserve fund balance declines below $25 million mil-lion or, 10.8 per cent of the subject 'wages for the preceed-ing preceed-ing year. The Utah Foundation study emphasizes that continuance of reduced unemployment tax rates is directly related to the amount of benefits paid out to claimants. If payments, collections, and wages continue at about the 1949 level, the reserve fund will be reduced to the $25,000,-000 $25,000,-000 minimum specified by law by the end of 1954 or early in 1955, requiring tax rates to be increased and probably restored to the 2.7 per cent maximum for all employers. An increase in' the level of benefit payments will result in an earlier restoration of maximum max-imum tax rates. Total benefits for the first three months of 1950 were 28 per cent higher than for the same quarter of 1949. The payroll variation plan has afforded Utah employers approximately ap-proximately $11,000,000 in tax relief in' the 2Vfc years of its operation. Tax rate reductions for eligible employers were effective ef-fective July 1, 1947. The reserve re-serve fund balance in' June, 1947 was $30,571,000 compared with $32,307,000 at the close of 1949. Utah payrolls covered by the unemployment compensation program i n 1949 decreased about 13 per cent, from $330,-504,403 $330,-504,403 in 1948 to $287,591,987 in 1949. |