By ERIC BRADNER, Evansville Courier & Press Statehouse bureau
bradnere@courierpress.com
State lawmakers zeroed in on fixing an unemployment fund stuck in the red last week, as new jobless rates underscored the importance of cutting off a federal line of credit and crafting legislative solutions.
The U.S. Bureau of Labor Statistics' monthly unemployment scorecard again showed substantial job losses for Indiana.
In January, Vanderburgh County lost nearly 1,500 jobs. Warrick and Gibson counties each lost 500 more. Statewide, almost 60,000 more Hoosiers are out of work, bringing Indiana's total number of unemployed close to 320,000.
Out-of-work Hoosiers rely on a state fund to pay unemployment benefits, but that fund is insolvent.
The Unemployment Insurance Trust Fund's deficit is up to $470 million, and with Indiana's jobless rate at 9.2 percent, the fund is bleeding dollars.
The federal government tossed Indiana a lifeline by allowing the state to borrow what it needs to continue writing unemployment checks. But without legislative action to decrease the fund's deficit, Indiana could owe the federal government $1.2 billion by the end of this year, Department of Workforce Development spokesman Marc Lotter said last week.
House Democrats floated a plan that failed to garner bipartisan support. The possible solutions - raising taxes employers pay into the fund, slashing benefits and limiting eligibility - are politically unpopular.
The grim news sets the stage for the state Senate's majority Republicans to develop their fix for the broken unemployment fund.
Sen. Dennis Kruse, an Auburn Republican who chairs the Senate Pensions and Finance Committee, is their point man.
Employers currently pay into the fund between 1.1 percent and 5.6 percent on the first $7,000 of each employee's annual salary, with the higher percentage charged on companies with a history of layoffs. The maximum benefit paid to out-of-work residents is $390 a week.
Kruse said his proposal likely would start with a maximum employer tax rate of at least 8.2 percent, and maybe higher. He said it would begin with a taxable wage base of $8,000, but that too could be higher.
But he also said he was interested in reducing the minimum tax rate on businesses that rarely lay off workers to 1 percent or slightly less.
And he said he envisioned a system in which weekly benefits would be lowered the longer a person was drawing claims.
In other news at the Statehouse:
State revenue: Heaping more pressure on state coffers is the State Budget Agency's announcement Friday that Indiana's revenue forecast again was too optimistic as the state took in fewer tax dollars than expected for the third straight month. Indiana collected $622 million in December. That's $42 million less than projected, and it's 10 percent less than December 2007.
Roads: As Gov. Mitch Daniels rolls out lists of roadway projects he'll fund with federal stimulus money, one area lawmaker said he's concerned Southwestern Indiana is being ignored.
Out of more than 50 projects already announced, only a handful would affect counties near the Ohio River. "There seems to be a disturbing trend to ignore Southern Indiana in favor of other areas of the state," said Rep. Trent Van Haaften, D-Mount Vernon.
The stimulus package gives Daniels and the Indiana Department of Transportation $440 million to spend. So far the administration has announced 53 projects with a $83.6 million price tag.
Coal gasification: Indiana Gasification, the company that seeks to build a coal-to-gas plant at Rockport, Ind., got a boost last week when the House advanced a bill that would allow the company to apply for federal loan guarantees to build the plant.
After clearing the Senate and a House panel, Senate Bill 423 moves to the full House for consideration.
Welfare modernization: Rep. Suzanne Crouch, R-Evansville, is urging Senate Republicans to consider her bill to halt the Family and Social Services Agency's rollout of its welfare eligibility system to 33 remaining counties. Sen. Vaneta Becker, another Evansville Republican, is sponsoring House Bill 1691 in the Senate.
The Associated Press contributed to this report.