Hawaii businesses could see their unemployment insurance taxes triple in the spring.

The state owes the federal government approximately $700 million after it took out a loan to shore-up unemployment funds last year. Under current state law, businesses have to pay off the loan.

Desperate to avoid that, state officials and legislators are racing to re-write the law.

“We are continuing to look at ways that we can pay back that loan,” said Linda Chu Takayama, Governor David Ige’s chief of staff.

“Under federal and state rules, it has to be paid back by the tax on businesses.”

Because the state unemployment insurance fund is depleted, the current state law requires a massive tax increase on businesses as soon as March.

“We’re talking about a significant jump. Let’s take on average, $600 per employee, that could jump to potentially $2,600 per employee,” said Sherry Menor-McNamara Chamber of Commerce Hawaii President and CEO.

“You add that on top of other proposed taxes and fees, it’s just going to be a tidal wave that will wipe out so many businesses.”

While the Hawaii Chamber of Commerce is working with lawmakers to find a better way, Governor Ige’s Chief of Staff said they have asked the federal to forgive the state’s loan.

“So far, there has been deafening silence from the administration in DC. But things may be change now that we’re going into a new administration,” said Takayama.

While many businesses struggle to survive, Takayama asked state lawmakers on Tuesday to help rewrite the rules and prevent such a sudden tax hike.

“We will be coming into this session with legislation that I hope you will be able to fast track and we would like to work with you on that, that will change the formula for how those taxes are applied,” Takayama said.

House Finance Committee Chair Rep. Sylvia Luke urged Takayama to work faster on the plan.

“This needs to be passed prior to the March assessment and it’s already mid-January,” said Luke. “Which means that by the end of February, it needs to be on the Governor’s desk for him to consider and implement and pass into law. So, we basically have about a month to get this done.”

This is inserted at the bottom