Businesses taxed extra to help pay for unemployment costs

Al Cantrell, owner of Al's Flowers, says the news cuts like a knife.
Al Cantrell, owner of Al's Flowers, says the news cuts like a knife.

MONTGOMERY, AL (WSFA) - Alabama business owners are now being told they're going to have to help the state pay millions in interest on money it borrowed to pay unemployment benefits to jobless workers.

"It doesn't seem like a real fair system," Al Cantrell, owner of Al's Flowers, says the news cuts like a knife. "We're paying unemployment for other employers, and we're a struggling business as it is."

A letter from the Alabama Department of Industrial Relations says the department is now requiring each employer to pay an additional .07% taxable wages by September 9th. Al says this is a tough time. "I work 7 days a week, I'm down to one full time employee, one full time driver, part time people up front"

This new tax not only cuts into his already struggling bottom line, but for Al, like many other small business owners it cuts into what he's bringing home at the end of the day. "In the past 3 or 4 years, my salary has decreased over $100,000", Cantrell says.  "I've been in business, this will be my 21st year. I'm tired of keeping everybody else up."

For almost two years, Alabama and 30 other states have been borrowing money to pay unemployment benefits. Now an interest payment is due September 30th. The law says the money must be repaid by assessment of employers, but Al says that shouldn't be his responsibility. "How much more of this can we take?... I resent the fact that I'm being penalized for being prosperous.

"I have to [pay the tax]. Don't have any choice to pay it."

This is the first time since the law was created in 1984 the Department of Industrial Relations has asked businesses to help cover unemployment costs. 

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