California businesses are paying higher taxes this year to help pay off the state's unemployment debt. So many people lost their jobs during the pandemic that the state had to borrow money to pay unemployment benefits. If California doesn't pay off the debt, business owners have to do it through higher taxes. California is one of five states that has not paid back its debt. Gov. Gavin Newsom withdrew a plan to pay $750 million toward the debt this year, citing the state's projected $22.5 billion budget deficit.