Colorado Chamber of Commerce members Tuesday sent a letter to state legislators asking for unemployment insurance relief in the face of rates that could spike up to 72% in coming years.

The incredible surge of unemployment claims during the pandemic, starting in March of 2020, completely drained the Colorado Unemployment Trust Fund.

Colorado now owes $1 billion to the federal government. There’s a “solvency surcharge” that can be billed to employers to replenish the fund, or lawmakers could possibly use some of the federal $1.9 trillion American Rescue Plan stimulus money.

Business leaders support Gov. Jared Polis’ budget proposal, which would dedicate $600 million in relief for the trust fund this legislative session, and urge lawmakers to do the same, according to the letter. It was sent to leading lawmakers, and to members of the Colorado Joint Budget Committee and the House and Senate appropriations committees.

“This session, the state legislature has the opportunity to provide real relief to businesses and their employees across Colorado, setting us on the course to recovery for years to come,” the chamber wrote. “One of the single most effective actions that can be taken to accomplish this goal is replenishing the UITF, which is funded solely on the backs of employers to compensate workers for unemployment claims.”

“Now is exactly the wrong time to implement a surcharge, or a fee, which effectively attacks employment when that is a key to recovery,” Senate Minority Leader Sen. Chris Holbert said at a legislative preview event last week.

Rep. Hugh McKean, R-Loveland and House Minority Leader, said last week the Colorado Department of Labor and Employment told him unemployment insurance rates could spike 72% in coming years.

Legislative leaders from both parties agree policymakers need to confront the challenge.

Senate Majority Leader Steve Fenberg, D-Boulder, earlier said lawmakers will be looking at ways to ensure that the unemployment trust fund, now shored up with a federal loan, receives substantial investments to avoid sticker shock through big premium hikes to small businesses.

“Unless legislators take action now, every business in Colorado will face historically high premium increases in the coming years – especially those that had to lay off workers through no fault of their own,” the chamber said. “It would be unconscionable to put this burden on the backs of businesses in these already difficult economic times.”

The chamber cited a study by the Common Sense Institute “indicating that compared to a 2020 baseline, Colorado employers face $5.3 billion in additional state and federal unemployment insurance payroll taxes between 2023 and 2027.”