House panel OKs delay in unemployment tax hike

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An Indiana House committee endorsed legislation Wednesday that would delay for one year increases in taxes that employers pay into the state's bankrupt unemployment insurance fund.

But the Democrat-controlled House's Labor and Employment Committee made changes to the bill that was previously passed by the Republican-controlled Senate. They would expand the number of people eligible for benefits and allow the state to collect nearly $148 million in federal stimulus dollars for the insurance fund.

The changes also could raise the maximum weekly benefit that the jobless can receive. State law now caps the maximum at $390 per week, but under the amended bill, benefits would be tied to a formula based on the average weekly wage in Indiana for the previous year. If it goes up as projected, the maximum on benefits would go up.

Democrats said the bill would help employers and the jobless, but Republicans said the extended benefits would put more financial pressure on the bankrupt unemployment fund. The changes were approved on a 7-4 party line vote, and then the overall bill passed 7-2 and was sent to the full House.

Republicans have sought the one-year delay in the tax increase, saying it could cost employers up to $360 million this year and cause layoffs in a still struggling economy.

Democrats have said the tax increase was meant to start shoring up the unemployment insurance fund, which already has borrowed $1.6 billion from the federal government to remain solvent. In order to go along with a delay in the tax increase, House Democrats insisted on the additional benefits for the jobless.

"It is prudent to try to help businesses the best we can, but we needed to try to do something for the workers also," said Democratic Rep. David Niezgodski of South Bend, chairman of the House Labor Committee.

"These dollars that you put into the unemployed's pockets, not one dime of it is going into the bank," he said. "They're going to be going for groceries, medicine, clothes."

The state has to choose among certain options for getting the $148 million in stimulus money. Two of them that House Democrats chose would allow people who need to take care of a relative's illness or disability to get benefits, as well as those who are unemployed but making progress in state-approved job training programs.

Republican Gov. Mitch Daniels' administration opposes taking the federal stimulus dollars for unemployment insurance, because once they run out, the extra eligibility standards would remain and have to be paid by the state fund.

Officials with the Department of Workforce Development said the stimulus dollars would run out in two to four years. After that, the extended eligibility standards would cost the fund $80 million annually. The department said the higher maximum benefits could cost up to $43 million a year.

"This (amended) bill puts more burden on an insolvent fund," said Rep. Matt Bell, R-Avilla.

Two Republicans stormed out of the committee before a vote on the overall bill was taken.

Eighteen states have not enacted changes to qualify for unemployment insurance stimulus money, according to the employment advocacy group National Employment Law Project.


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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.