Senate approves unemployment tax overhaul

SANTA FE, N.M. (AP) — A proposal to revamp how much employers pay into New Mexico's unemployment insurance program is heading to the House.

The Senate approved an overhaul of the financing system on a 40-2 vote on Tuesday.

One provision would require employers to pay a higher tax rate if they have a high workforce turnover that causes unemployment claims to exceed the employer's payments into the system.

Employers with the worst unemployment experience currently hit a maximum contribution rate and then other businesses subsidize those employers by paying more to keep the program solvent.

Supporters of the proposed rate-setting formula said it would eliminate the political influences of lawmakers periodically changing tax rate schedules based on cash balances in the unemployment compensation fund.