Governor Sam Brownback Signs House Bill 2576 Providing Relief on Unemployment Tax Rates

TOPEKA, Kan., April 8 -- Gov. Sam Brownback, R-Kan., issued the following news release:

Governor Sam Brownback today signed House Bill 2576, providing approximately 44,000 Kansas businesses with tax relief in the current tax year.

The Governor was joined by legislators, government officials and members of the business community as he signed the bill which will provide an estimated total of $42 million in relief from unemployment insurance taxes in this tax year which began in January.

"The health of our unemployment trust fund is one more indicator of our economic growth," said Governor Brownback. "At this time last year, our unemployment tax fund owed $75 million. With a projected July 1 balance of $190 million in the trust fund and zero outstanding loans, Kansas is now in a position to continue to provide benefits to those who are without work through no fault of their own, and reward successful businesses in the state."

Unemployment insurance taxes cost Kansas employers hundreds of millions of dollars each year. House Bill 2576, which passed unanimously in both houses, provides relief to employers who have shown a positive contribution to the insurance system by paying into the system more than its employees have used it.

"Kansas has gained more than 45,000 private sector jobs since 2011 and the unemployment rate continues its trend below 5 percent for the first time since 2008," said Secretary of Labor Lana Gordon. "This improved economy has allowed the Legislature and Governor Brownback to lessen the tax burden on Kansas employers that support the unemployment insurance program. Kansas continues to be a great place to do business."

This tax reform resolves issues in the current system that punishes successful businesses by protecting them against higher unemployment rates that do not truly reflect the business' risk of employee layoffs.

"We applaud Gov. Brownback, the state legislature and the Kansas Department of Labor for their commitment to creating a positive business environment in the state," said Scott Siemers, Cerner vice president. "Cerner is proud to have partnered with the Kansas Chamber of Commerce, other state business leaders, as well as the labor department, to support legislation that fosters job creation, while protecting employees."

This bill brings unemployment tax reform on three important fronts: for employers setting up new operations in Kansas after being successful in other states; for rapidly expanding employers; and for positive balance employers who have consistently paid hundreds of millions of dollars during the recession. Non-construction employers who start a business in Kansas, after being successful in another state, have the option of transferring their earned unemployment experience rating from that state and applying it to the Kansas tax table, instead of using the standard new employer rate of 2.7 percent.

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