Senate Minority Leader Brian W. Jones announced on May 8 the introduction of Senate Joint Resolution 15, which urges Congress to protect California businesses from a federal payroll tax increase due to the state’s unpaid COVID-era unemployment insurance debt.
The move comes during National Small Business Week and addresses concerns that employers could face higher taxes because California has not repaid its federal unemployment insurance debt. The issue is significant for small businesses, which make up nearly all of the state’s business sector and employ millions of workers.
“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 specifically calls on Congress to halt a federal tax hike resulting from Governor Newsom’s decision not to repay the state’s federal unemployment debt.
According to the California Business Roundtable, California employers are expected soon to pay a 5.2% payroll tax—almost nine times higher than those in states without such debts—with small businesses facing a particularly heavy burden as they represent 99.8% of all state businesses and support about 7.6 million jobs.
During the pandemic, many employers were required to close while billions in fraudulent unemployment claims were paid out by the Employment Development Department (EDD). Fraud losses are estimated between $20 billion and $32 billion.
Because fraud was not controlled and surplus funds were not used to pay down debt at the time, business owners may now be responsible for repayments over decades until fully resolved.
“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 onto SJR 15 in support of this effort.
Jones has engaged in public service through legislation related to education and veteran support; he was born into a military family in Austin, Texas; led as Senate Minority Leader; has been married since 1992 with three adult children; won seats in both legislative chambers; and graduated from Grossmont College before earning his bachelor’s degree at San Diego State University—all according to his official website.
