In an effort to prevent a future tax hike on Virginia businesses, Gov. Ralph Northam proposed allocating $862 million in federal relief money to the Unemployment Insurance Trust Fund, but a small business association is warning it might not be enough.
The Unemployment Trust Fund, which provides unemployed Virginians with benefits, is funded primarily through payroll taxes from employers. During the COVID-19 pandemic, Virginia’s fund dried up and the state was forced to borrow money from the federal government. Unless the losses can be fully offset, business taxes would automatically increase to maintain the fund because of the state’s funding formula.Read More