[r20] Dermody Votes to Repeal Huge Business Tax Increase (2/25/2010)

Thursday, February 25, 2010

Start Date: 2/25/2010 All Day
End Date: 2/25/2010

Dermody Votes to Repeal Huge Business Tax Increase

STATEHOUSE-State Rep. Tom Dermody (R-LaPorte) today voted in support of Senate Bill 23, the measure that would repeal the largest tax increase on employers in the state's history. SB 23 would repeal House Bill 1379 (2009), which passed the House last year without Rep. Dermody's support. Without the passage of SB 23, over $300 million in taxes would have gone into effect on over 80,000 Indiana employers that provide jobs for over 2 million Hoosiers. 

Senate Bill 23 passed the House by a vote of 82-17.

"I have been consistent from day one on opposing this tax increase on Hoosier employers during these difficult economic times," said Rep. Dermody. "I made it very clear last year when House Bill 1379 passed that I felt this tax increase would have terrible and far-reaching effects on employers during this economic downturn. We have to look out for Hoosier workers and the job loss this tax increase could have caused-this would have a devastating effect when our state's economy is trying to recover."

However, in the House Labor and Employment Committee the House majority placed an amendment in SB 23 that loaded the bill with several unrelated provisions. Rep. Dermody supported the effort to remove the language on the House floor, but the amendment failed with a party line vote of 47-51.

"I was frustrated with the majority's actions to take a very good bill and insert several provisions I simply do not support. It is my hope that as this bill continues to move through the process these 'poison pills' will be removed and we are allowed to pass a clean bill that simply delays or repeals the tax increase.  I voted to  support the bill because if I had not, the tax increase would have hit employers at absolutely the wrong time and it came down to the lesser of two evils." 

The measures Rep. Dermody opposes in SB 23 include the following:

# Application Initiative. The bill removes the requirement that certain unemployed individuals must show proof that they have filed at least one job application per week in order to remain eligible for benefits.


# Unnecessary worker classification regulation. The bill allows any third party to file a complaint claiming an employer is misclassifying workers, which can result in an investigation of the employment relationship between an individual and a contractor/subcontractor by the Department of Labor. 


It also requires certain procedures to be followed in investigations, and for a civil penalty to be assessed by the Department of Labor for the failure to properly classify individuals as employees.


# Alternative Base Period. The bill establishes an alternative method of determining the base period for unemployment compensation benefits.


# Maximum Benefit. The bill removes the cap on the amount of wage credits. It limits the amount of an individual's benefit to 55 percent of the state's average weekly wage.


# School Building Project Referendums. The bill increases the minimum cost of elementary school building projects from $10 million to $15 million and high school building projects from $20 million to $30 million, which is subject to public question when statewide average unemployment rate in the previous calendar year for the construction industry is 10 percent or higher.