Massive Waste in State Unemployment Office...Now Businesses Footing the Bill

By: Whitney Ray Email
By: Whitney Ray Email

Tallahassee, Florida- July 25, 2012

Sir Cheezy, also known as James Cullen, is a culinary artist, a food truck entrepreneur serving up gourmet grilled cheese sandwiches to hungry foodies around the state capitol.

Says James Cullen, Sir Cheezy: "We play with all sorts of different ingredients, all sorts of cheese, different meats. Every week we have something new and different."

James took out a business loan for his mobile kitchen, and drops thousands of dollars on high quality ingredients. Gas is a big budget item. But what's also hitting James in his wallet is an increase in Florida's unemployment tax.

Says Cullen: "Currently I'm paying about 25 to 30 dollars every other week, so roughly 50, 60 dollars a month."

Florida's unemployment tax increased 50 dollars this year to 121 dollars per employee, but if that isn't enough to frustrate business owners...Part of the increase is being used to pay for massive waste in the state's unemployment office.

A report by the US Labor Department found Florida overpaid the unemployed by 500 million dollars from 2008 to 2011. Much of the waste is being attributed to the burden put on the state's unemployment office during the Great Recession.

The overpayments clearly took a toll on the system. In 2009, the state ran out of cash to pay claims. It borrowed 2.6 billion federal dollars to keep unemployment check circulating.

Now to pay back the loan, the interest and the overpayments, business owners like James will have to make more money to pay the higher taxes.

The Department of Economic Opportunity declined our request for an on-camera interview about the 500 million dollar mistake. But a spokesman responded by email saying not all of money was lost and in fact the state has already reclaimed some of it. We responded asking for specifics, but no one could produce them.

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