The state agency that oversees unemployment benefits says the rates charged to employers to cover the unemployment trust fund will go up in January. Iowa Workforce Development spokesperson, Kerry Koonce, says they review the trust fund each year to make sure it has enough money coming in.

Koonce says they determined the fund needed more money in it to remain solvent and they are moving from tax table four to tax table three, which is an increase in taxes. Koonce says Iowa has traditionally had some of the lowest rates in the country, but unemployment claims have gone up and individuals are remaining on unemployment longer due to the recession.

Koonce says the Iowa rates for employer unemployment contributions range from zero to 9%. She says there are about 40% of the employers at the zero rate, and some of those will see the rate go up, while others won’t see it change. Koonce says the rates are based the type of industry your business is in and the number of layoffs or firings that you’ve had to pay benefits on over the last five years. Koonce says if your business has been able to make it through the recession without layoffs and firings, then won’t see any change.

“Different states use different theories, but the theory that was set forth back in the late 80s here in Iowa when it was worked out as a compromise between all sides, was that the employers that are managing their system, they’re not laying off employees, those kinds of things, should not be penalized against those who’re constantly having overriding layoffs, people coming on and going off, those kinds of things,” Koonce says.

Iowa’s seen federal money come in to extend unemployment benefits, but Koonce says that does not impact the state fund. Koonce says the three federal extensions do not have anything to do with the state trust fund, the only thing that impacts the fund are the “original benefits” which are a maximum of 26 weeks. The trust fund currently has a balance of $507-million — however 2010 is still expected to pay out the second largest amount of benefits in history.

Koonce says changing the amount employers pay in is expected to raise an additional $88-million for the trust fund.