The Experience Rating Index is a measure of the overall degree to which the costs of a states UI system are passed on to employers based on the costs specific employers impose on the system. [...] Employers are most able to pass along the parts of the tax that apply to every firm and the parts that do not vary based on employers experience (the flat parts of the tax).12 The federal tax is a flat tax, as is the portion of an employers tax bill that reflects the firms cost share of non-charged and ineffectively charged benefits. [...] The states Department of Finance (DoF) has estimated that approximately a quarter of the cost of implement- ing an alternative base period would be returned to the state in the form of lower welfare costs.48 Previous estimates by the EDD suggest that implementation of an alternative base period would increase eligibility for UI by approximately four percent without changing the basic requirement t. [...] Raising Californias taxable wage base to the national average would reduce the regressive nature of the UI tax and spread the cost of the system more equitably among employers with minimal competitive impact. [...] At the end of the third quarter of 2000, the balance of the fund, $5.786 billion, equaled 235 percent of the benefits paid during the preceding 12 months.53 Because of the funds strong position, modest benefit increases could be absorbed in the near term with minimal or no increased revenues.