Business owners: Unemployment system not working in Indiana

The sessions were two of 22 being coordinated across the state between the caucus and the National Federation of Independent Business, a small-business advocacy group.

“It’s bipartisan,” said Barbara Quandt, NFIB Indiana director. “The legislators are all coming together and asking small businesses about what issues are affecting them.”

Wednesday’s hour-long meeting in Bloomington was the 10th in the series of town halls, according to Quandt. It was attended by Eric Koch, R-Bedford, Peggy Mayfield, R-Martinsville, and Terri Austin, D-Anderson. Austin is co-chair of the Small Business Caucus.

One of the caucus co-chairs has been trying to make every meeting. The issues brought up at meetings have varied, according to Austin.

“Every one is different, they are very different,” she said.

But unemployment and the unemployment system were a big topic both Tuesday in Indianapolis and Wednesday in Bloomington.

Don Rix, president of Big Red Liquors, on Wednesday, asked about the unemployment insurance rates businesses have to pay. That prompted Austin to share a story about a landscaper who told her he had to pay $56,000 in a year-end unemployment supplemental.

“I can tell you ours exceeds that,” Rix said. “We consider it part of our responsibility. It’s part of being a responsible business owner and operator. But they certainly have changed and they certainly can impact very small businesses — I would think pretty significantly.”

Business owners weren’t the only ones at the town hall meeting. Troy Phelps, a business advisor at the Indiana Small Business Development Center, was there. He shared feedback he’s gained from business owners.

“In terms of what I hear from the state perspective, the number-one thing is paying of the payroll taxes and filing the forms,” he said. “The state side is much more complicated in terms of filing the forms or paying it.”

In Indianapolis Tuesday, business owners filtered a similar — if not more poingnant — message to members of the caucus.

The owner of DECO Group, a commercial painting company in Indianapolis, said she didn’t want to sound heartless.

But she that she and other business leaders have a problem: They can’t compete with public assistance programs.

The benefits “are so deep and so wide that, truthfully, people don’t need to work for what we can pay them,” South said. She said some workers would rather accept government assistance and stay homd to be with their children than come to work, even to a job with benefits.

People around South nodded emphatically as she continued. “And the unemployment system, it’s broken,” she said. “The benefits have become an entitlement program.”

The lawmakers at the Tuesday session — four of them, from both parties and both legislative chambers — listened intently. Some took notes. They asked South and other business leaders to stay after the meeting and give them more information. They gathered business cards.

“Legislators too often get insulated in the Statehouse and going out and meeting small business owners on their own turf, on their own time I think opens up the dialogue and you learn so much more,” said Austin Tuesday during the meeting, which was at Quality Environmental Professionals, a firm in Indianapolis that bids on state work.

The company’s owner, Deb Peters, told lawmakers that she struggles to hire qualified employees — geologists, engineers and other highly-educated professionals — because so many of them leave Indiana. She said the “brain drain” is making it tougher for her company to succeed.

And she complained the state has moved away from contracting with smaller businesses for work. Instead, Peters said, small firms like hers must become subcontractors of larger companies — often from out of state — that get the bids for projects.

John Guynn, the sales manager at DKC Inc., a disposable health care products company, told the caucus a similar story. He said bidding preferences meant to help Indiana-based firms win contracts aren’t working.

Guynn said that in 2008, the Indiana Family and Social Services Administration went with a Michigan company to provide incontinence products to its clients. Now, he said, the agency has issued another request for bids. But he held up the stack of rules to show lawmakers and said, “You almost have to get an attorney to go through all this garbage.”

The proposal calls for quality vendors. But Guynn said “bidders know it’s all going to come down to pricing and the big companies come in and low-bid the small companies.”

About a dozen business owners spoke at the meeting about taxes, regulations and training programs. But one topic — the state’s unemployment insurance system — kept coming up.

Quandt said that’s been the case at all of the town hall meetings so far. It’s a reflection, she said, of a growing frustration among business owners that the unemployment system is difficult to deal with and tipped too far in favor of the workers.

“Each meeting has had unemployment issues,” whether they involve compliance problems or benefits levels or taxes, she said.

On Tuesday, business owners told stories about employees collecting benefits despite quitting after little time on the job. They said some Hoosiers apply for jobs only to fulfill a requirement of receiving benefits but then aren’t interested in coming in for interviews. And they said the Indiana Department of Workforce Development isn’t providing unemployed Hoosiers with the skills and training they need to be good workers.

Ray Cox, owner of the Elite Beverage liquor stores in Indianapolis, told lawmakers that it’s obvious the unemployment system is being abused.

“It was once a safety net,” Cox said. “Today it’s another form of entitlement and it’s at the employers’ expense.”

Sen. Jean Breaux, an Indianapolis Democrat who attended the town hall Tuesday, said she was surprised to hear about the unemployment problems. Lawmakers recently overhauled the insurance system to try to dig it out of debt. The changes included a cut in benefits, an increase in employer taxes, and new rules aimed at stopping fraud.

But Breaux said additional changes may be in order.

“That seems to be a real big burden on businesses,” Breaux said. “I thought we had figured out a balance to that but it seems like we may need to work on it some more.”

Information from Lesley Weidenbener of thestatehousefile.com was used in this story.