By John Byrne, Post-Tribune staff writer
INDIANAPOLIS -- Democrats unveiled their own plan to bail out the state's bankrupt unemployment system Monday, relying on higher payments from businesses to meet a deficit approaching $1 billion as Indiana's jobless rate swells.
Unlike the Republican plan, the House Democrats' proposal includes no decrease in benefits to employees to help fill the yawning hole in unemployment revenue.
The plan was released at a meeting of a House-Senate conference committee convened to negotiate a compromise on the unemployment crisis, which has become one of the most contentious issues this legislative session.
Rep. David Niezgodski, D-South Bend, estimated the latest outline would bring in an additional $1 billion per year or more by increasing the taxable wage base from $7,000 to $14,000 and introducing a new payment scale for businesses.
The companies that lay off the most workers in Indiana would pay 10.2 percent, or $1,428 of the $14,000 base for each employee each year.
Employers currently pay at most $392 per worker each year.
With a federal loan of more than $500 million already propping up the unemployment fund, Republicans proposed more than doubling employers' annual pay-in to $820 at the high end.
The GOP plan also reduced employee benefits to 50 percent of wages, and recommended a sliding scale which would decrease benefits by 30 percent after two months on unemployment unless a worker was enrolled in a state-licensed job training program.
Niezgodski said lowering employee benefits is counterproductive as the state tries to pull out of the recession.
Tom Hanson, general manager of labor relations for U.S. Steel, praised the plan because it includes supplemental unemployment payments on the list of deductible payments to be covered by the employer.
An earlier version of the bill excluded the supplemental payments, which Hanson said would cost U.S. Steel dearly in Northwest Indiana in the event of a large-scale layoff.
"It would have cost U.S. Steel an additional $283 per week for every eligible employee in a layoff," Hanson said.
If U.S. Steel were to lay off 15 percent of its Northwest Indiana workforce of more than 6,000, it would cost the company $11 million more to cover unemployment costs for the full 39 weeks if the supplemental payments were excluded, Hanson said.
The full bill will undergo significantly more negotiations in the next week.