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Last night, Senator Steven Choi, Ph.D. (R-Irvine) offered amendments to AB 1896 (González) on the Senate Floor to begin paying down California’s more than $20 billion unemployment insurance debt and protect employers from escalating federal payroll taxes.
The amendments would have required the Department of Finance to propose an agreement with the U.S. Department of Labor to freeze federal unemployment tax increases and additional interest charges for four years. In exchange, California would be required to commit $5 billion annually from the General Fund toward repaying the debt.
“California’s unemployment insurance debt is not going away, and neither is the growing burden being placed on our state’s businesses,” said Senator Choi. “These amendments offered a responsible path to pay down the debt and protect employers from additional tax increases. Instead of debating the proposal, Senate Democrats voted to silence the discussion and continue passing the cost of Sacramento’s failures on to California business community.”
In 2022, then-Assemblyman Choi introduced AB 1596, which would have used a portion of California’s historic $97.5 billion budget surplus to repay the state’s federal unemployment insurance debt. The bill was rejected in committee. This year, Senator Choi also coauthored SJR 15 (Jones), which sought federal relief from unemployment tax increases imposed on California employers because of the state’s outstanding debt.
“California had the resources to solve this problem years ago,” Choi said. “The longer the Legislature refuses to paydown its debt to the federal government, the more California employers and their workers will continue to pay in increased taxes.”
Watch Senator Choi present the amendments here.