[r33] Fixing Indiana's Insolvent Unemployment Trust Fund (4/2/2009)

Thursday, April 2, 2009

Start Date: 4/2/2009 All Day
End Date: 4/2/2009
The Senate has provided a great start for addressing the expected $1.5 billion hole in the Unemployment Insurance Trust Fund, tackling a problem the state has avoided for years.

It fell to the Senate to address the issue because the House majority caucus ignored House Republican suggestions and moved nothing of its own forward, withdrawing its legislation before a vote could be taken. The Senate's version may not be perfect, but it's better than the nothing the House majority came up with.

The weekly maximum benefit has been increasing each year between 1997 ($236) and 2005 ($390), but the premiums for employers did not keep pace. With the highest unemployment rates we have seen in decades, something had to be done now to solve the problem.

The Senate passed a bill that attempts to solve the problem by adjusting weekly benefits, increasing premiums on businesses and addressing the problems of fraud and abuse. Some details:

- The maximum weekly benefits will start at $420 and drop to $320 over a 26-week period, with the minimum benefit at $50 per week.
- The wage base for premiums increases from $7,000 to $10,000. Premiums increase from 1.1 percent and 5.6 percent to 0.75 percent and 8.2 percent. 
- Changes the definition of "seasonal employment" from 26 weeks to 42 weeks. 
- Expands the definition of "gross misconduct" to stop the practice of employees drawing benefits while awaiting conviction.

On March 26, the House approved a dissent on the bill (HB 1379) when it returned for final approval. This means the proposal will be addressed in conference committee, where legislators representing each caucus will meet to work out the bill's final version.

We don't need a quick fix; we need legislation that addresses all the causes of our current problems. This is our best opportunity to make that happen.

Contact me with questions or concerns by e-mail at h33@in.gov, by phone at 1-800-382-9841 or by writing me at the Statehouse, 200 W. Washington St., Indianapolis, IN 46204.


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