Lawmakers try for compromise to fill Indiana's empty unemployment fund

By Dustin Grove (grove@wsbt.com)

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The State of Indiana's borrowed more than $500 million in federal loans to keep its unemployment insurance fund afloat. Now, lawmakers are grappling with a repayment plan. WSBT-TV Photo

By WSBT 24/7 News

Story Created: Apr 14, 2009 at 3:21 PM EDT

Story Updated: Apr 14, 2009 at 5:44 PM EDT

It's a position no state wants to find itself in. Hundreds of thousands of people out work and the unemployment insurance fund: Bankrupt.

The State of Indiana has borrowed more than $500 million in federal loans to keep the system running while lawmakers come up with a way to fix it and pay the loans back.

But opponents of a proposed solution say it could end up hurting the very people the system is supposed to help.

“It’s going to drastically affect the livelihoods of these people,” said Troy Warner, an electrical union worker outside South Bend’s unemployment office. “I hope they can find a way to do this without cutting benefits.”

Warner and other members of the Indiana State Building and Construction Trades Council handed out fliers warning people the plan could reduce their benefits.

The proposal — which passed in the Senate along party lines — would:

  • Increase the amount of taxes businesses pay;
  • Tighten eligibility requirements;
  • Reduce benefits on a sliding scale.

    While the maximum benefit would go up nearly $30 in the beginning, it would decrease over time.

    State Sen. Joe Zakas of Granger said the reduction is designed as an incentive for people to find work. He said if a person is enrolled in a certified training program, their benefits wouldn’t be cut.

    What's Next?

    The bill is now in the hands of a committee of lawmakers trying to work out some sort of compromise.

    The head of that committee, Representative David Niezgodski, a Democrat from South Bend, said as far as he's concerned, cutting benefits shouldn’t be an option.

    "That is not the right thing to do when you have in excess of 300,000 people out of work.”

    Niezgodski said he hopes to have a compromise measure to the floor for a vote before the April 29 deadline when legislators will adjourn for the year.

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