FLORIDA - Florida businesses will take a big financial hit in 2010.

They will see a 12-fold increase in the amount they pay in unemployment compensation tax.

Right now, the minimum tax businesses pay is just $8.40 per employee, but next year, that minimum tax will jump to over $100 per employee.

That's because the state's unemployment compensation fund went broke in August, and Florida is currently borrowing $300 million a month just to pay unemployment claims.

Greg Neumann first told us about a possible tax hike on Monday. He joins us with more on its potential impact.

The tax had been so low that most employers like Gary Sapp barely noticed it.

But now that Gary knows just how much it will be, he knows he'll have a hard time adjusting his auto shop's bottom line.

When auto shop owner Gary Sapp first heard about a potential unemployment tax increase on Monday, he was very scared.

Now, he knows there was reason to be.

"In times when people don't have any extra money to spend, we're gonna be forced to raise our rates to compensate."

"Due to the economic downturn, there's a lot of employers that are already struggling. And a lot of them from week to week to make payroll. And this kind of increase is gonna be a big hit to them."

For Gary, the hike will raise his tax from just over $75 a year to just under $1,000.

That won't cause him to lay anyone off, but it may cause him to delay future plans.

"It's gonna make us very hesitant to hire employees, and it's gonna increase our requirements of our current employees."

But Johnathan Taylor with Landrum Staffing Services says many employers will have to look at cuts.

"They are going to have to reduce the number of employees that they have. They're going to reduce wages, they're gonna reduce benefits...whether that's health or their contribution to the 401K."

And Taylor says that's exactly the last thing Florida's economy needs.

"They need some incentive to retain the employees they got, and to hire new ones, and this is just a disincentive to do that."

The maximum unemployment tax will also increase next year, from $378 per employee to $459.

The rate generally goes up with each employee a business has had to lay off in a given year.Florida's Unemployment Compensation Tax to Increase Twelvefold