[r79] In Lehman's Terms 3/22/09 (3/22/2009)

Sunday, March 22, 2009

Start Date: 3/22/2009 All Day
End Date: 3/22/2009

STATEHOUSE - Another week has gone by, and I am beginning to see why the wheels of government grind so slowly. I think they like it that way.

The House began receiving Senate bills the first week of March. At the end of last week, we had passed about 10 bills.

The political game is played down here like a game of chess. Each move is calculated, and future moves are anticipated three or four moves ahead. Good bills that could have positive effect on an array of issues are held up in committee or sent to the Rules Committee for a legislative death.

I talked last week in my newsletter about the tax caps and the scuffle that is brewing over that issue. Let me talk about another hot potato - the unemployment insurance (UI) fund.

If you have read the newspapers or listened to the news at all, you have heard that Indiana's UI trust fund is drained. We are currently borrowing money from the federal government (thank goodness they have gobs of money just laying around) at an alarming rate.

We have a huge hole to fill, and the sinking economy is not helping the matter. Indiana's fund by the end of the year could be close to $1.4 billion (with a B) in the red. This is a serious problem.

Let me go back for a second and see if you remember anything from your high school civics class regarding the roles of the two branches. Specifically, who spends the money.

Both the U.S. and the Indiana constitutions provide that any spending or revenue-generating bills originate in the House of Representatives. The basic reason is that the House is closer to the people and is more answerable to a smaller group of constituents.

Anyway, the Democrats this session offered a UI bill that would barely fill the hole and was very one-sided against businesses. The bill was never voted on.

By doing this, we gave the Senate a huge problem. The Senate had to find a revenue bill that the House did pass and then attach the UI solution to that bill. That is where we are today.

In my opinion, the fix is going to have to involve a lot of players and, in the end, it is more than likely no one will be happy. Some of the ideas being kicked around:

  • Increase the amount of payroll the employer pays the tax on. Currently that amount is $7,000.
  • Create a wider scale regarding the rate charged on the payroll amount. Decreasing the low end would affect businesses that do not have a lot of turnover or seasonal layoffs. Increasing the high end would affect businesses that use the UI pay a higher amount in.
  • A one-time fee (tax) to be paid by the business on the total amount of UI tax collected.
  • A sliding scale of benefits. The weekly benefit would be higher at the start but would decrease over the length of the payment, so the net amount paid out at the end would be lower. Indiana has one of the             highest benefit schedules in the country.
  • Tighten up eligibility. This could include drug testing, proof of job searching and requirements to accept employment at a lower pay scale than what the person previously earned.

These are just a few of the ideas being tossed around. Any input you want to direct my way would be appreciated. My fear is that if we do not solve this problem before we adjourn on April 29, we may be called back for a special session, and that is not good for anyone.

I hope we can come to an agreement before the deadline, but at the pace we are moving it does not look good.

I would like some feed back on this issue and any other issues that I may have addressed. Contact me by at 1-800-382-9841, e-mail me at h79@in.gov or write me at the Statehouse, 200 W. Washington St., Indianapolis, IN 46204.

Keeping things in Lehman's terms,
Rep. Matt Lehman