State lawmakers to take on unemployment insurance

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Businesses with a history of laying off employees would pay more in unemployment insurance costs, and workers in industries where layoffs occur regularly would receive lower benefits under a bill Indiana lawmakers are preparing to take up.

Rep. Dan Leonard, R-Huntington, the author of House Bill 1450, said the measure aimed at fixing the state's insolvent unemployment system is fair because it costs more for companies that lay off employees the most often and includes a formula to ensure that people who earn the same salary receive the same unemployment benefits.

"This makes things a little fairer," he said.

Leonard said the bill would not change unemployment benefits the typical out-of-work person receives.

The bill tries to address three problems with the state's unemployment insurance system: a $2 billion debt to the federal government, interest on that debt and fixing the system so it is fiscally sound in the future. The first committee hearing on the bill is scheduled for Tuesday.

The Legislature has been working on fixing the unemployment insurance system since voting in 2009 to raise employers' premiums. That was supposed to happen last year, but lawmakers put off the increase for a year because of the recession. Those changes go into effect this year.

That fix, however, didn't specify who would pay back the $60 million to $70 million a year interest on the debt. Lawmakers say by law that federal regulations don't allow the interest to be paid off directly through the unemployment insurance fund.

The bill being considered by the House would lengthen the amount of time it would take to repay the debt, reducing the cost to employers, but add a surcharge to those companies to pay off the interest. Lawmakers say most businesses will pay about the same each year as they would have under the bill passed in 2009. Some businesses that have a history of laying off employees will see a bigger increase.

Under the plan, Indiana's unemployment system should be solvent by 2020.

Kevin Brinegar, president of the Indiana Chamber of Commerce, said although he hopes to see some minor changes in the bill, he called the legislation was good overall considering the situation, calling it a "lose-lose for everybody because of the deficit we have."

"We think this will add stability to the system and get us through this difficult period," he said.

Leonard said the bill would soften the blow on employers compared to the bill passed in 2009, saying he hopes it might lead to more people being hired.

The bill also would make changes in how much in weekly unemployment insurance some people would receive. Currently, two people paid $30,000 a year can receive starkly different unemployment benefits — as much as $190 a week — depending on how many weeks they worked. The bill would give the same benefit to people who earn the same amount annually.

Indiana State AFL-CIO president Nancy Guyott called the measure disappointing, saying she believes the bill would affect most hourly workers who become unemployed.

"Most hourly workers have fluctuations in the number of hours that they work over time and anybody in that situation would have reduced benefits," she said.

Leonard said the bill also would eliminate unemployment benefits for people who work at plants where there are regularly scheduled shutdowns for reasons such as retooling.

Senate Tax Chairman Brandt Hershman, R-Monticello, said the bill strikes a responsible balance between impact on employers and employees.

"It's a very difficult challenge to address, particularly in this economy," he said. "It's a difficult problem to solve."


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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim