Senator Steven Choi joined Senate Republicans in supporting Senate Joint Resolution 15, urging Congress to prevent California employers from being punished with higher federal unemployment taxes caused by state government failures and pandemic-era policy decisions.
California’s unemployment insurance debt currently exceeds $20 billion, triggering escalating federal payroll tax increases on employers across the state.
“California businesses should not be forced to pay for the failures of Sacramento Democrats,” said Senator Choi. “Small businesses followed the rules, survived extended shutdowns, and kept Californians employed during one of the hardest periods in our state’s history. Now they are being hit with higher taxes because the state failed to manage the unemployment system responsibly.”
SJR 15 calls on Congress to ensure businesses are not penalized with increased federal unemployment taxes when state debt results from government shutdown decisions, prolonged restrictions, or failures in fraud prevention.
Senator Choi noted that he previously proposed a direct solution to the crisis through Assembly Bill 1596 in 2022. AB 1596 would have appropriated $19.3 billion from the General Fund to fully repay California’s federal unemployment debt before employers faced years of additional payroll tax increases. Importantly, California had a $97.5 billion dollar surplus at this time.
“Four years ago, I introduced AB 1596 to fully repay this debt and protect California employers from exactly what is happening today,” Choi said. “Unfortunately, Assembly Democrats killed the bill in committee. Had they acted responsibly then, businesses would not be facing these growing federal tax penalties now.”
According to the Employment Development Department, California’s unemployment insurance fund remains deeply insolvent and is projected to carry deficits exceeding $22 billion through 2026. Employers are expected to continue paying increasing taxes each year the debt remains unpaid.
SJR 15 was introduced by Senator Brian Jones and coauthored by Senator Choi and other Senate Republicans.