Senate Minority Leader Brian W. Jones calls out Newsom’s failure to pay off UI debt, introduces resolution to protect employers from payroll tax increase

During National Small Business Week, Senate Minority Leader Brian W. Jones is taking action to protect California employers from yet another tax increase. Today, Senator Jones introduced Senate Joint Resolution 15 (SJR 15), urging Congress to shield businesses from federal tax increases triggered by California's unpaid COVID-era unemployment insurance (UI) debt.

"Every other state paid down its debt, but not California. Now, businesses that survived shutdowns, kept employees on payroll, and held their communities together will pay for Gavin Newsom's failures," said Jones. "Shutdowns. Extended shutdowns. Failed fraud prevention. Enough is enough. Employers should not be paying for his mistakes. It's time to save California businesses and jobs."

SJR 15 calls on Congress to stop a federal tax hike on California businesses caused by Governor Newsom's decision not to repay the state's federal unemployment debt.

According to the California Business Roundtable, California employers will soon pay a 5.2% payroll tax, nearly nine times as much as those in other states that are debt free. The burden would be especially hard on small businesses, which account for 99.8% of all business in the state and support 7.6 million jobs.

During the pandemic, employers across the state were forced to stay closed while the state's Employment Development Department (EDD) paid out billions of dollars in fraudulent unemployment claims. The total amount of fraud is estimated to range from $20 billion to $32 billion.

Because the state failed to control fraud and pay down its federal debt while it had a budget surplus, California businesses are now stuck paying it back, possibly for decades, until it is fully repaid.

"If you don't pay a bill, you'll get hounded by a collection agency. But apparently if you're the governor of California, you can ignore the tab and force someone else to pick it up," Jones said. "Don't be surprised, governor, to see more jobs leave. Our small businesses deserve better than this. They deserve a state where they can thrive, not a state that kicks them when they're already down."

All ten members of the Senate Republican Caucus have signed on in support of SJR 15.

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