Businesses resist jobless fund plan

INDIANAPOLIS (WISH) - The state unemployment fund is bankrupt and state lawmakers are locked in a debate over what to do next.

Indiana has already borrowed $1.6 billion from the federal government to pay unemployment insurance claims. A bailout plan passed by state lawmakers last year calls for employers to pay new premiums later this year.

One of those employers told the House Labor Committee that he has to make a trade-off between creating new jobs and paying the premium.

"Our increase is $500,000," said Steve Austin of Red Gold. "That's a big increase for us."

That's why Republicans want to delay the bailout for a year.

Monticello Republican Sen. Brandt Hershman asked the committee, "Now, who wants to increase premiums on a business during a recession?"

Employer groups including the Manufacturers Association and the Chamber of Commerce back the delay while labor organizations want the problem solved.

"We're all about to go to Crazy Eddie's and ask for 12 months same as cash," said Pete Rimsans of the Indiana State Building Trades Council, "Give us a one-year float borrowing $350 million from Uncle Sam."

However, the Democratic chairman of the committee says, in essence, a deal's a deal.

"And when we passed this legislation (last year) we did so with the assumption things would get much worse before they get better," said Rep David Niezgodski (D-South Bend.)

The committee did not take a vote though Chairman Niezgodski won't rule one out yet.

He points out that 34 other states are increasing unemployment insurance premiums this year, and so far there is no indication that the federal government will come to the rescue.