No compromise in sight for Indiana unemployment legislation

INDIANAPOLIS | State lawmakers remained far apart on an unemployment insurance compromise Friday and House Speaker Patrick Bauer, D-South Bend, suggested he might adjourn for the year without dealing with the issue.

Legislators are divided on whether and how to delay or repeal a scheduled increase in employer-paid unemployment premiums. The Republican-controlled Senate initially supported a one-year delay while the Democratic-controlled House proposed a total repeal, as long as their jobs package of employer tax cuts and worker training programs were included in the legislation.

Senate Republicans are now asking for a two-year delay, which Bauer says is unacceptable because it would force Indiana to borrow $1 billion from the federal government to keep its insolvent unemployment program running. A one-year delay would only add $500 million to the current $1.6 billion owed to the U.S. Department of Labor, Bauer said.

"That kind of a blowout, if you will, is pretty hard to fix," Bauer said.

Both the House and Senate met briefly Friday afternoon and recessed to allow negotiations to continue.

Bauer said the Senate is refusing to approve other pending legislation until there is a deal on unemployment. Among the legislation caught up in the negotiating is House Bill 1367, which would allow schools to transfer money among their different tax-supported funds, up to the amount recently taken away from schools by Republican Gov. Mitch Daniels to cover the state's budget deficit.

Daniels cut $300 million from primary and secondary education and nearly $200 million from colleges and universities.

"Education has been cut about $500 million. So if you give a break of $1 billion to business, it would be nice to give a $40 to $50 million break to them (schools)," Bauer said.

The General Assembly is required to adjourn for the year no later than Sunday. Bauer said he's willing to stay in session over the weekend "if there is a purpose to it."

Several Senate Republicans were spotted calling Indianapolis hotels trying to reserve rooms for the weekend. Many hotels are sold out due to the Big 10 basketball tournament taking place in Indianapolis.

Another possibility is that Bauer will adjourn the House for the year while the Senate remained in session. That would likely kill the education proposal, but could also force the Senate to accept the House version of the unemployment legislation.

For that reason, Senate leaders say they want a deal done on unemployment before moving any of the other remaining legislation.