Lawmakers want jobless tax hike delayed

INDIANAPOLIS (WISH) - Republicans in the Indiana General Assembly want to put a bailout plan for the state's unemployment insurance fund on hold.

The bailout plan passed earlier this year calls for businesses to pay higher unemployment insurance premiums. It takes effect on January 1.

Now, if the Republicans get their way, the higher premiums will be delayed until 2011.

GOP leaders in the state Senate want to see if the federal government will forgive Indiana's debt in the meantime.

The fund that pays unemployment benefits is $1.3 billion in the red, and that number will grow to $2.7 billion by the end of next year.

But, by then, as many as 40 states will have a similar problem.

Sen. David Long (R-Fort Wayne) said, "This will give some time to catch our breaths and see what the federal government is going to do. Are they going to help the states or not? And we don't know at this point."

"Now is not the time to raise taxes on businesses especially small businesses in this state," said House Minority Leader Brian Bosma (R-Indianapolis).

Representative David Niezgodski (D-South Bend) negotiated the bailout plan and he's not ready to endorse a delay.

"We are trying to do something that would put us on the road to solvency," said Niezgodski. "So I don't know what has changed."

A delay would not lead to a reduction in benefits to unemployed workers because the money is now coming from the federal government in the form of interest free loans and no payments are required.

The gamble here is will the loans will be forgiven for all states. If not, it will take years to get the fund back in the black.