By John Byrne, Post-Tribune staff writer
INDIANAPOLIS -- The state's unemployment system is broke and overburdened, lawmakers lamented Thursday.
But few options emerged at a House Labor and Employment Committee hearing for fixing what is becoming one of the more vexing problems of this state legislative session.
Maybe that's because many of the options -- tougher unemployment eligibility, higher taxes on businesses or employees -- are unsavory, especially with the state's economy hurting so badly.
The problem started in 2001, when the unemployment reserve was flush with $1.6 billion.
When the recession hit in the wake of the Sept. 11 attacks, the General Assembly lowered the amount employers must pay into the fund, and increased benefits to out-of-work Hoosiers. The reserve began to shrink steadily, as more money was pulled out than came in.
Now, with the state in the throes of another recession, the unemployment fund is dry.
Workforce Development Commissioner Teresa Voors estimated the state will need to borrow $500 million from the federal government to cover the cost of unemployment checks through the end of June.
It will cost the state about $25 million to repay the federal loan, Voors said.
Committee Chairman David Niezgodski, D-South Bend, told Voors the General Assembly needs some guidance on the issue from the governor.
George Raymond, a vice president with the Indiana Chamber of Commerce, told the committee it's unrealistic to expect business owners to bear the whole burden of replenishing the unemployment reserves.
"To dump this all on the backs of employers is the worst thing we can do," Raymond said.
He suggested an additional tax on workers of $4 to $5 per month should be part of the equation.
Raymond also said the state should consider changing unemployment eligibility standards.
He wondered whether manufacturing workers who get laid off for a couple months each year while the factory gets reconfigured should be able to collect unemployment.
"They aren't working for that couple of months, but they still have jobs they will return to," he said.
But Ted Bilski, trustee and business agent for Teamsters Local 142 -- as well as a member of the Lake County Council -- said workers have the right to expect the unemployment safety net to be there without having to kick in more money now to prop the system up.
"People have been paying their taxes for years, never applying for unemployment, and now that they have to, they're facing long delays in getting qualified for benefits," Bilski said. "And on top of that, now workers may have to kick in more of their wages? Come on, that isn't right."