Indiana unemployment insurance fix off to slow start

BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com

INDIANAPOLIS | Fixing Indiana's bankrupt unemployment insurance fund will take an unpopular mix of employer tax hikes and worker benefit cuts, state officials have concluded.

The fixes are so unpopular, it seems, that neither lawmakers nor Gov. Mitch Daniels' administration cared to offer a starting point Thursday during a legislative hearing.

"What's the fix?" Rep. Russ Stillwell, D-Boonville, asked Teresa Voors, commissioner of the Indiana Department of Workforce Development.

"I don't have a vote in the Legislature," Voors responded. "I'd be happy to look at suggestions you all have."

Voors said the state has borrowed $216 million from the federal government -- at an estimated interest rate of 4.6 percent -- since the unemployment fund went broke in early November.

In 2000, the unemployment trust had a balance of $1.6 billion, which was viewed as too large a surplus. Since then, lawmakers have increased worker benefits from $236 a week to $390 while decreasing employer taxes, resulting in eight straight years of deficits.

The solution for solvency is likely to increase payroll taxes on manufacturers and construction companies whose workers draw unemployment benefits during planned seasonal layoffs. Daniels has said those employers don't appear to be paying a fair share.

The House Labor and Employment Committee also heard horror stories Thursday from layoff-bitten Hoosiers, who said the Indiana Department of Workforce Development forces them to go through a confusing and glitch-ridden online benefit application process or wait hours in line at branch offices.

They said they've been hung up on, given faulty advice and forced to go more than a month without income while their claims were processed.

"My (debt) collectors call four times a day," said Jerry Keener, a laid-off forklift operator from Muncie. "I tell them to call Mitch Daniels."

Voors told the committee her agency handles 85 percent of unemployment applications within a week and processes 93 percent of first-time claims within 21 days. She said extra staff has been hired to handle claims in the hardest hit areas.