There is a reason the Indiana Chamber advocated in the 2010 legislative session for a two-year delay in the state’s unemployment insurance tax increase. That’s because two major things needs to happen — and both will take time. One is a comprehensive look at the state system; that means reviewing eligibility and benefit levels in addition to simply raising the tab for employers. Second is that Congress needs to craft a national solution to the billions that are being borrowed by numerous states, ones that do not have the capability to pay back the loans or the interest.

Indiana lawmakers did grant a one-year delay, saving employee jobs as employers could ill afford the $400 million tax increase. Little progress, however, has been made on the two elements to the long-term solution. Thus, another delay will certainly be on the agenda come January.

Stateline.org, in a story yesterday, details the dollars involved nationally and the need for Congress to act.

More than 30 states have borrowed nearly $40 billion. Some of the current totals:

• California, $7.5 billion
• Michigan, $3.8 billion
• New York, $3.2 billion
• Pennsylvania, $3.0 billion
• North Carolina, $2.4 billion
• Ohio, $2.3 billion
• Illinois, $2.2 billion
• Others topping $1 billion are Indiana ($1.7), New Jersey, Florida, Texas and Wisconsin

According to the story:

It adds up to more borrowing for the programs than ever before, and it’s likely to balloon by year’s end. If interest rates projected at around 4 to 5 percent were added to that total amount, it would force states to pay an additional $1.6 to $2 billion currently unaccounted for. And that’s not the only additional fee that could be imposed. For every year the loans aren’t paid back, employers will lose at least 0.3 percent from the federal credit. That could mean that an employer’s tax rate of 1.1 percent would inflate to 1.4 percent.

Doug Holmes, the president of UWC Strategies, a business-oriented consulting firm, says 25 of the 31 states borrowing federal dollars will be unable to pay off their loans in time unless Congress acts soon to revise the rules. But this may be an inopportune time for Congress to try to renew the interest-rate moratorium, says Mike Katz, of the National Association of State Workforce Agencies (NASWA). Nothing is likely to be considered before the election, and if Republicans make substantial gains, as is expected, a new stimulus is very unlikely.

Michigan, a state that has a federal unemployment insurance debt close to $4 billion, provides a striking example. During the last recession in 2002, state lawmakers raised weekly benefits by about 20 percent. Policies like this led the state to unemployment insurance insolvency in 2006, three years before the surge of borrowing among other states began. Because of this, Michigan has already felt the federal penalties that most states are now fearing.

The closest that states have ever come to this level of borrowing happened in 1983, when the recessions of the mid-1970s and early 1980s added up to a collective unemployment insurance debt of $28 billion (the number is adjusted to 2007 dollars). During the first few years of the 1980s, Congress passed a series of reforms that aided the ability of states to pay off the loans. 

By 1990, all the outstanding debt was paid off, but much of that was aided by a prosperous economic rebound throughout the mid- to late ’80s. “If we’re going to recover from this period, we need to get lucky,” says NASWA Executive Director Rich Hobbie. “That is a steep hill to climb.”

There are not too many games of any type played in which no score is kept. And while one might argue that crafting the laws that apply to Indiana companies, their employees and all Hoosier citizens is no "game" in the traditional sense, the antics that go into that process would suggest otherwise.

No matter the terminology, legislators run for office vowing to serve their constituents. The Indiana Chamber represents nearly 5,000 business organizations with 800,000 employee constituents. The Chamber tells the lawmakers what bills it is tracking, the business community’s positions on those important issues, why specific bills are supported or opposed — and then we keep score on how they vote.

The tallies are contained in the annual Legislative Vote Analysis, released today. It has 2010 and two-year vote scores for all 150 members of the Indiana House and Senate. The goal: let those employers, employees and all Hoosier voters know which legislators are supporting pro-economic development, pro-jobs initiatives. It removes the talk and the posturing from the equation. The vote totals speak loudly.

As the introductory letter asks: Was your legislator part of the solution or part of the problem? Scores range from a low of 33% (a certain long-time legislator from South Bend who doesn’t always vote because of his leadership position in the House) to a high of 93% (from a Fort Wayne-based senator). Overall, the totals are disappointing. Take a look for yourself, share the information with others and use it as a guide as the election process plays out this year for all 100 representatives and a portion of the senators.

Read today’s press release and access the full report.

Tuesday morning at the Indiana Statehouse was a good time for catchy phrases. Whether the rest of the week will see substantive legislative action is yet to be seen.

House Speaker Pat Bauer has reconfirmed his plan to adjourn this session by the end of Thursday (10 days before the March 14 deadline date for such action). His closing words to House members (before calling for a recess until 2:30 today) as he urged them to work diligently on conference committees: "If you can make an agreement, so be it; if you can’t make an agreement, so be it."

Prior to that, House Minority Leader Brian Bosma said his caucus was not opposed to a Thursday ending as long as all the needed business was taken care of. He cited five priorities, led by a clean and clear delay in the unemployment insurance tax increase, that would thwart the "go home early" plan. His final comment: "It’s better to be a little slow and right than quick and wrong."

The Senate has not publicly weighed in today (it has a light calendar with a 1:30 beginning), although President Pro Tem David Long has previously stated there is nothing wrong with an early ending, but not before key issues are addressed.

The real work is taking place in conference committees and in negotiations among leadership. Stay tuned for the outcomes.

In the ongoing "we’ll do anything to save our jobs" crusade, the Ross Township trustee in Lake County testified at length Wednesday before the Senate Local Government Committee. He was opposing the insertion of real reform language (no township boards and county councils having binding budget authority) into the township-by-township referendum proposal passed by the House.

The trustee, who also serves as the head of the United Township Association, explained that the township is important. He said his office receives donations for 170 children to enjoy Christmas. Based on his 2008 annual financial report, people young and old also must get the opportunity to enjoy the Fourth of July. Among the expenses listed: $24,000 to Mad Bomber Fireworks Prod., Inc.

That’s your taxpayer money — at least those in Lake County. Can we really let it go up in smoke like that?

Chamber President Kevin Brinegar explains what the state legislature must do to keep the unemployment insurance tax increase from costing Indiana jobs.

A popular phrase about Washington politics is that the the republic — or at least your tax dollars — are safer when Congress is not in session. If that is the case, one can rest easy for a fortnight (always liked that British term). Snow shut down the nation’s capital last week and a President’s Day recess takes lawmakers back home or elsewhere in the coming days.

What about in the Hoosier state? Legislators seem determined to exit Indianapolis quickly. Whether any harm is done before that time remains to be seen. The General Assembly session must end by March 14, but the committee deadline is being pushed ahead by a week and all involved are trying to wrap up business by March 5. Is that good or bad for you?

• Good if the increase in unemployment insurance taxes is delayed. It seems straighforward. Leave last year’s increase intact and companies will pay near $350 million more in taxes, the trust fund will remain woefully out of balance and employees will lose their jobs because battered businesses have no other place to cut. Legislators, particularly those in the House, need to hear from you. Check out the details and make a difference
• Bad if they proceed with passing legislation that prohibits employers from having a policy that disallows guns in the workplace. This appears headed to the governor, however, so a veto is likely the best hope for common sense to prevail. Here are the details
• Good if someone in power stands up for taxpayers and the poor and strives to bring about meaningful township reform. Our money is not being used wisely and the poor are not getting all they deserve with administrative costs that exceed actual relief. Meaningful is not a township-by-township referendum, but — for a start — getting rid of advisory boards and letting county councils have binding budget overview. Read more

Sure, there are a few other issues out there. But get these three right and the good will exceed the harm.

House Speaker Pat Bauer and former Speaker Pro Tempore Chet Dobis have served together as Indiana legislators since 1970. That’s a lot of collaboration, and undoubtedly a little conflict, over 40 years.

Conflict is center stage now as Dobis has been removed from his second in command leadership position. The reason: he didn’t support his Democrat colleagues on a committee report that would have likely killed the Illiana Expressway, a project heavily supported in Dobis’ Northwest Indiana district.

Frugal Hoosiers has the latest, with an assist from the Northwest Indiana Times. The impact on the remainder of the legislative session, and beyond, remains to be seen.