After Irene, Lawmakers, Owners Grapple With Unemployment Rate Increases

May 7, 2013

Tropical Storm Irene is still packing a punch for some Vermont businesses.

That’s because more than 200 employers were forced to lay off workers after the storm—and other flooding that year. And some have seen their unemployment tax rates go up, sometimes dramatically.

That’s what happened to the Woodstock Farmers’ Market.

On warm spring day, the Ottauquechee River flowed gracefully around the back of the store, which sells plants, produce, and other groceries.

But when Irene struck,  this same river was crashing into the building. The business closed down for 11 weeks for repairs. Owner Patrick Crowl pointed out a high water mark on the back wall.

Unfortunately for Crowl, water isn’t the only thing that rose.

So did his unemployment insurance rates. That’s because Crowl had to lay off about 45 workers for almost three months. They drew about $79,000 from the state’s unemployment insurance fund—a fund that the Farmers’ Market rarely taps because it almost never lays anyone off.

Many loyal employees, like Melanie Plourde, volunteered to get the store back in shape, even as they collected unemployment checks.

“If we didn’t have the community here there’s no way we would have been able to do it, and as fast we did,” Plourde said.

But because of  the unusually high benefit payout, the company’s unemployment tax rates suddenly jumped almost fivefold. That was a nightmare for the store’s business manager, Steve Moyer.

“And the difference from that in a number on an annual basis would take us from $8,000 a year in expense to about $40,000 a year,” Moyer explained.

The Farmers’ Market frantically started calling legislators after it got the new tax bill last fall.

For owner Patrick Crowl, higher taxes are never easy to absorb, but coming after a storm that ruined business for months and required costly repairs, it’s an especially tough blow for many businesses like his.

“That doesn’t seem right when we had an act of God put us down,” Crowl said.

It doesn’t seem right to Alison Clarkson, either. She’s the state representative from Woodstock.

A bill she helped craft would fully protect employers from rate increases following disasters. A compromise would  allow rates to rise, although not as steeply as they did right after the storm. And it would also provide a cushion in the event of a future disaster.

Clarkson is disappointed by those limits but still hopeful the bill will pass.

“This will benefit employers impacted by Irene and going forward and going forward for future disasters it will protect them, not as fully as I would like and certainly we can work on this in the future.”

The measure under consideration  would raise the Farmers’ Market’s bill to $12-15,000 not $40,000.

But the Farmers Market says that doesn’t go far enough. Its business manager would rather that rate increases be shared among all employers across the state, rather than be focused on those that have suffered because of Irene.