With Hawaii's jobless rate still rising and a higher unemployment tax about to take a bigger bite out of employer coffers, Gov. Linda Lingle urged lawmakers yesterday to pass legislation that would create new jobs and preserve existing ones.

Lingle's comments came after the release of the state's monthly jobless report, which showed that the seasonally adjusted unemployment rate inched up to 6.9 percent in January from a revised 6.8 percent in December while the number of people without jobs swelled to 43,450 from 38,400 in January 2009.

“;With many of our residents out of work, it is critical that the Legislature pass immediate and meaningful legislation that will help private businesses create and retain jobs,”; Lingle said in a statement. “;My administration has proposed comprehensive legislation to encourage businesses to hire new employees, including providing tax credits for the creation of new jobs and developing 'green' jobs through Hawaii Clean Energy Investment bonds to finance energy efficiency projects.”;

Lingle also said she has directed her Cabinet to move forward on job creation programs that do not require legislation. Among those programs are Hawaii Premium Plus, which would reimburse employers for the cost of health care premiums for new hires, and the Volunteer Internship Program, which would allow people on unemployment to work for or volunteer their time with a prospective employer.

The governor is expected to sign into law—possibly as early as today—a bill that reduces businesses' unemployment taxes this year to an average of $630 per employee from an average of $1,070 per employee that was scheduled to go into effect. Still, the new rate is considerably higher than the current average of $90 per employee and could force businesses on the edge to cut their work force even further.

“;I think there could be more layoffs,”; said Ryan Markham, spokesman for the state Department of Labor and Industrial Relations. “;There's definitely going to be those companies that already have cut everything to the bone. Those companies will have to come up with this tax payment. I think they may have no choice but to hit payroll.”;

Markham said the payments will be retroactive to Jan. 1 but will be spread out quarterly. He said if Lingle signs into law the new rates—which go up for four consecutive years—that businesses will receive their new tax assessments this month and will need to make their first payments in mid-April unless they appeal.

State Labor Department Director Darwin Ching said that after the economy bottoms out, there is traditionally a continued rise in unemployment for about 10 to 18 months and that his department is advocating additional relief in the current legislative session.

Economist Leroy Laney, who last November forecast the state's jobless rate to average 7.5 percent this year, said he now expects the figure to be in the low 7 percent vicinity—partly because the unemployment insurance tax increase was subsequently reduced.

“;Usually the unemployment rate does continue to rise after the end of a recession because it's a lagging indicator,”; said Laney, an economic adviser to First Hawaiian Bank and a professor of economics at Hawaii Pacific University. “;We've begun to see some improvement in tourism and some improvement in real estate, but I think the recovery will be slow and fragile. It wouldn't take much of some kind of aftershock to make it flatten out.”;

The U.S. Labor Department said it revised unemployment data for all the states to reflect the annual updating of population estimates by the U.S. Census Bureau, as well as to reflect a re-estimation in its unemployment model and new seasonal adjustments.

For the individual islands, Honolulu's jobless rate rose to 6.0 percent from 5.3 percent in December, the Big Island increased to 9.9 percent from 9.4 percent, Kauai rose to 9.1 percent from 8.7 percent, Maui decreased to 8.5 percent from 8.6 percent, Molokai rose to 15 percent from 11.8 percent and Lanai fell to 8.3 percent from 8.6 percent. The numbers are not seasonally adjusted.