Idiots abound in the Indiana State Legislature
Posted by Mike Sylvester - 3/19/10 @ 8:01 pm - Filed Under Featured, State Politics
Indiana’s Unemployment Fund is bankrupt.
In 2000 the Indiana Unemployment fund had a positive balance of 1.6 billion dollars. Due to mismanagement by Democrats and Republicans the state of Indiana has collected less in Unemployment taxes every year since 2000 from employers than it has paid out to former employees who are unemployed. At the end of 2009 the Indiana Unemployment fund was 1.5 billion dollars in the red. Per the Indiana Legislative Services agency the Indiana Unemployment Fund had an operating deficit over 1.3 billion dollars.
During the 2009 legislative session the Indiana Legislature decided to fix the problem by increasing taxes on employers. These tax increases were to take effect on January 1st, 2010. These tax increases were expected to at best retire the debt by 2022 according to the Indiana Department of Workforce Development. These fixes were paltry at best. What needed to happen was to tighten eligibility requirements and close loopholes that allow seasonal workers to claim unemployment benefits.
During the 2010 Indiana legislative session our legislators decided to delay the tax increase until January 1st, 2011. Worse yet they decided to remove the requirement that each person collecting unemployment apply for at least one job per week. This move has been called “labor friendly” by some. I call it just plain stupid! Per the Indiana Legislative Services Agency this change is expected to cost the State of Indiana about twelve million dollars annually. This estimate basically means that the Indiana Unemployment fund will pay out an additional twelve million dollars per year because some of the people collecting unemployment will not get a job since they are no longer required to look for a job; instead they will keep collecting unemployment.
As of February 16th, 2010 there are a total of 28 states who have had to borrow money from the Federal Government to fund their unemployment system. As of February 16th, 2010 Indiana owed 1.65 billion dollars. There are only four states who owe more than Indiana: California 7.1 billion, Michigan 3.4 billion, New York 2.5 billion, and Pennsylvania 2.3 billion. Texas and Illinois are just a little behind Indiana at 1.6 billion dollars owed. Note that each of these states is much more populous than Indiana.
Each employer in 2009 and 2010 paid $56 into the Federal Unemployment system for each employee as long as that employee earned at least $7000 in a calendar year. Unless the Federal Government changes the rules each and every employer in Indiana will be forced to pay an additional $21 in Federal unemployment tax per year because the State of Indiana has mismanaged its unemployment fund so badly that the Federal Government is charging interest by levying an additional tax on all Indiana employers. This is a tax increase on Indiana employers of 37.5% on the Federal unemployment tax employers are required to pay annually.
All levels of our Government need to stop kicking the can down the road and need to immediately implement plans to fully fund all future obligations.
I am a fiscal conservative and I am sick and tired of politicians who just keep kicking the can down the road.
Mike Sylvester
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4 Responses to “Idiots abound in the Indiana State Legislature”
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Mike, Mike, Mike, you are only a CPA, relying on such arcane processes as basic math. That old 2+2=4 is soooo out of date.
You just don’t understand how it’s supposed to work, we print money, buy votes, repeat.
The Indiana republicans who pushed this delay (along with the Chamber of Commerce and Indiana Manufacturers Association) are the biggest hypocrites ever. Decrying federal deficit spending and socialism on the one hand, borrowing more money from Uncle Sam to pay Indiana unemployment benefits on the other hand. The Chinese are now paying our Indiana unemployment benefits. Meanwhile, all Mitch can say is that it’s a lot worse in other states. At some point there needs to be political courage to pay our own bills when they come due.
I Have been in business for almost 70 years, at this time We are doing lucky to pay all the taxes, insurance required by law etc. Very little building or construction of any type is being done in this state, why? The road to putting this state back on track is the construction of new bridges, roads and highway rebuilding. If mandates are to be made how about giving indiana industry a leg up instead of a kick in the pants at every turn. I guess our legislature is finding it more important to address picture ID of a 65 year old buying a six pack than taking care of the state. I am a life long republican, but I and most everyone I know is feed up this all this stupid politics both dems and rep. How about just a little common sence just once it might actually work.
Let’s face it—those entrenched in the political world don’t understand what you are talking about. They are involved in navel gazing.