Another tax increase proposal By Gov. John N. Dalton's administration encountered strong opposition today as members of a Virginia General Assembly committee resisted a plan to bolster the state's faltering unemployment insurance trust fund.
Members of a joint House-Senate committee reacted cooly to a proposal offered by Dalton's top financial aide, Charles B. Walker, to boost the tax that employers pay by 43 percent through 1981. The plan would cost employers $54 million a year.
Legislators handling the issue said they preferred an approach that would force the heaviest tax increase on employers whose workers customarily have high rates of unemployment claims.
Sen. Elmon T. Gray (D-Sussex), the chairman of the committee, said that most legislators leaned toward "putting most of the burden on those (employers) who have had bad experiences then maybe they'll do more to keep their people."
In his opening address to the assembly in which he proposed a controversial gasoline tax, Dalton also warned that the state's $100 million unemployment trust fund needed new revenues. He said then that the trust fund, which has been dwindling steadily since the 1974-75 recession, could go bankrupt next year if a predicted major recession materializes.
Dalton delayed proposing a higher tax on employers until today. A Dalton spokesman was quick to insist that the plan, presented by Dalton cabinet member Walker, was still flexible.
Walker was simply "transmitting" the recommendations of the Governor's Advisory Board on Economics, not carrying a personal message from Dalton, said Paul G. Edwards, the governor's press secretary.
Members of the Joint Committee on Labor and Commerce postponed until Monday a final decision on the administration proposal.
Currently, the state requires employers to pay between .05 percent and 3.2 percent of the taxable wage of each employe into the unemployment insurance trust fund. The rax rate is determined by the employer's record of unemployment claims, with those employers who frequently lay off their workers paying the maximum of 3.2 percent.
In addition, state law requires that a surcharge equal to 40 percent of that amount be collected from each employer whenever the fund drops below $258 million. The fund is currently down to $100 million, and state budget analysts say it could turn in a deficit of between $7 million and $28 million next year if no addition revenue sources are found.
The administration's proposal called for increasing the unemployment surcharge from 40 percent to 100 percent as of July 1, thus raising an additional $18 million this year and $54 million in 1981.
The increase in funds raised for the last six months of 1980 under the plan would be less than half of 1981's increase, state officials said. That is because most of the umemployment taxes for 1980 would already have been collected by the time the Dalton proposal takes effect. Employers are required to pay unemployment taxes on only the first $6,000 paid to each worker.