Legislators are moving step by step to find ways to improve the insolvent unemployment insurance fund facing Indiana. Improving the fund is, to me, as important as the budget because the number of out-of-work Hoosiers is skyrocketing.
The current system is also doing more harm than good for Indiana and Hoosiers. In 2008, the fund paid out $1 billion in benefits while only taking in $579 million in revenues. We estimate by 2009, the benefits will be more than $1.3 billion with revenues less than $550 million.
We need unemployment insurance benefits that will work for the employer and the employee, without the risk that either one can abuse the system, that will support only those who have experienced legitimate layoffs or separations from work, and that will provide strict requirements to ensure out-of-work Hoosiers are legitimately searching for work.
Indiana is not alone in this mess. Thirty other states also have unemployment insurance funds that are either insolvent or at risk. Twelve states have taken out federal loans, totaling $4 billion, to boost their unemployment insurance funds. We need a solution now that will prevent Indiana from following suit.
Rep. David Niezgodski (D-South Bend) developed a bill in the House to attempt to improve the current unemployment insurance fund, but pulled the plug right before third-reading deadline, leaving the House with no bill.
Legislation regarding the trust fund has to come out of the House because it is a fiscal issue. Therefore, since the majority party was unable to pass workable legislation, party members forced the Senate to take on the responsibility.
Sens. Brandt Hershman (R-Wheatfield) and Dennis Kruse (R-Auburn) took the initial step and proposed an amendment to House Bill 1379 to replenish the fund by increasing employer premiums, to root out the millions of dollars in fraud, waste and abuse and to encourage workers to improve their skills to compete in the 21st century economy.
The amendment would:
- Close in the gap between benefits paid out and premiums paid into the trust fund by increasing the premiums on businesses who withdraw from the fund more than they pay in, and decrease the premiums for those businesses that pay into the account more than they withdraw.
- Make it harder for some companies that regularly lay off workers for a short period each year from taking part in the system.
- Require recently laid-off employees to report earnings such as severance pay, bonuses and vacation pay.
- Give unemployed Hoosiers an opportunity to enter into a re-training program, offered by the state, to give them a further advantage in finding a job. However, if you complete the program your maximum benefit would stay the same each week. If you do not complete the program, your maximum benefit of, let's say, $390 would be increased to $424 for the first four weeks, drop to $382 in weeks five and six, $344 in weeks seven and eight, and $310 in weeks eight through 26.
The amendment passed 9-3 in the Senate Tax and Fiscal Policy Committee. The bill now moves to the full Senate for further consideration.
Please understand that the bill is a work-in progress and it is not final until April 29. It is my hope that the bill, in the end, will benefit all Hoosiers - workers, unemployed, small businesses and large industries.
If you have specific questions regarding your unemployment insurance benefits, I encourage you to contact the Department of Workforce Development by calling 1-800-891-6499.
If you have any questions or comments regarding the unemployment insurance legislation, please don't hesitate to contact me. Send letters to me at the Statehouse, 200 W. Washington St., Room 401, Indianapolis, IN 46204, e-mail me at H53@in.gov; or call me toll-free at 1-800-382-9841.