OCEAN CITY — Business owners across Maryland will see a significant reduction in unemployment insurance taxes beginning next year, which is welcome news in the resort area where seasonal workers are hitting the unemployment rolls in droves and in Worcester, which typically has one of the highest unemployment rates in the state.
Governor Larry Hogan last week announced most Maryland businesses will see a significant reduction in unemployment insurance taxes, perhaps to the lowest possible rate allowed under state law, beginning in the first quarter of 2016. Maryland employers will now pay between $25.50 and $127.50 less per employee per year than what they are currently paying under the current rate.
“Due to the strong growth of the Unemployment Insurance Trust Fund, we are pleased to be able to let business owners know that the cost of unemployment insurance in Maryland will be reduced,” said Hogan last week. “This is a real win for our business community and the state as a whole.”
The reduced per-employee rate was promulgated by a spike in the state’s Unemployment Trust Fund, which has ground by over $125 million to over $983 million since this time last year. Due to the fact most Maryland employers pay the minimum tax rate, many companies will see a 50-percent reduction unemployment insurance from $51 to $25.50 per employee per year.
“The unemployment tax rate reduction is a sign of Maryland’s improving business climate that will allow employers the opportunity to thrive and create jobs as work together to strengthen our economy,” said Kelly Schultz, Secretary of the Department of Labor, Licensing and Regulation.
Closer to home, the significantly reduced unemployment tax rate per employee comes at a good time. Many resort area businesses have been shutting their doors in recent weeks, sending hundreds and maybe thousands of employees to the unemployment rolls. In an area with traditionally high seasonal unemployment rates, the reduction could provide a fiscal shot in the arm for many businesses.
“This is fantastic news,” said Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones this week. “Governor Hogan is actually keeping the promise of helping small businesses in our state. This will definitely be well-received by Ocean City business owners due to their large number of seasonal employees. It should be very helpful for them.”
Jones said the unemployment insurance tax decrease is one of several pro-business initiatives started by the Hogan administration.
“The new Department of Commerce Secretary, Mike Gill, met with our board over the summer and he subsequently sent out an email requesting feedback on how to make Maryland more business-friendly,” he said. “I truly believe this administration is working much better with communication and collaboration than any other administration I’ve seen.”
In other local economic development news, West Ocean City hotelier Annemarie Dickerson learned this week she has been appointed by Hogan to the State Economic Development Commission. Jones said the chair of the commission addressed the Maryland Travel and Tourism Summit last week.
“He is extremely knowledgeable and he mentioned the governor is really trying to foster business growth and has open ears on how to do so,” she said. “Fortunately, Annemarie has never been one to be afraid to share an opinion, so we will definitely have our voices heard on that front.”