Story Created:
Feb 26, 2009 at 2:46 AM EST
Story Updated:
Feb 26, 2009 at 2:46 AM EST
INDIANAPOLIS (AP) — Political sparring in the narrowly divided Indiana House has sidelined legislation to help fix the state's bankrupt unemployment insurance fund — but lawmakers say the critical issue will be revived.
The proposal would have raised taxes on employers to help balance the fund. The account pays out millions of dollars more than it collects and is relying on federal loans to issue unemployment checks.
Bill sponsor Rep. David Niezgodski, D-South Bend, said he didn't call for a vote on his proposal Wednesday — a key legislative deadline in the Democrat-led House — because Republicans weren't willing to join his party in supporting the tax increase. Republicans said Democrats should pass the bill themselves if they support the legislation. Both sides fear votes for tax increases could be used against them in future elections.
Both Republicans and Democrats said the issue must be revived in the GOP-led Senate.
Senate President Pro Tem David Long, R-Fort Wayne, said House Democrats should have sent the Senate legislation to fix the unemployment fund. He said both sides must work together on a plan before the legislative session ends April 29.
"These are going to be very difficult decisions for all of us to make, and we could go into overtime on this issue," Long said. "I'm serious. If people aren't willing to roll up their sleeves and work to find a solution, we could be here until the end of May working on this particular issue."
House Speaker Patrick Bauer, D-South Bend, said a special session wasn't needed. But he called on Republican Gov. Mitch Daniels to get involved in the issue to prevent one.
Daniels has not provided specific suggestions to fix the fund, saying lawmakers must determine that policy matter, said Daniels spokeswoman Jane Jankowski. However, Daniels has said that any solution should not harm the state's business climate.
Bauer said any agreement on the unemployment insurance fund would have to be something that both Republicans and Democrats can support.
"Obviously we're not there yet," Bauer said.
The state's unemployment insurance fund wasn't always in trouble. In 2000, the state's unemployment fund had a surplus of $1.6 billion. But lawmakers raised benefit payments for the unemployed and lowered employer premiums, draining the account.
The House bill would have raised taxes on employers to help balance the insolvent account, but wouldn't lower payments to unemployed workers or tighten eligibility rules. Niezgodski said the legislation was a good starting point that Republicans should have supported. He noted that two Republicans voted for the bill in committee.
"This is a bipartisan problem that must be addressed without thinking about political impact," Niezgodski said. "Our responsibilities are greater than simply seeking to make cheap political points."
But House Minority Leader Brian Bosma, R-Indianapolis, said a real solution would look at benefit payments and eligibility rules, not just tax increases. He said Democrats who control the House 52-48 should pass the bill on their own if they truly think it's a good start.
"It's the majority's responsibility to move forward on critical issues," Bosma said Wednesday. "We did it when we were in the majority. We didn't stand and wait for Democrats to agree."
Niezgodski's bill would have raised more money from businesses by increasing both the taxable wage base and tax rates. The changes would have raised an additional $260 million a year for the account. That's not enough to make it balance as last year it took in $579 million but paid out $986 million in benefits.
But lawmakers are also waiting to see whether federal stimulus money could help the fund. The Daniels administration is still looking at strings attached to stimulus money to see whether the state should accept it, Jankowski said.
