Action Alert: Act Now to Protect Unemployed Workers in WV

See??? I told you so... (4.00 / 3)

Gov. Joe Manchin is expected to announce Wednesday afternoon that he is appointing acting Supreme Court Justice Tom McHugh to fill the vacancy created by the death last month of Justice Joseph Albright.

McHugh to replace late justice Albright on court

80% of the state's geography COMPLETELY IGNORED by Governor Manchin... just like I said he would. So much for his little "commission" on replacing Justice Albright.

---

by: WV26003 @ Tue Apr 07, 2009 at 21:35:57 PM UTC

I'm not prepared to dissent on support of SB 246 until (4.00 / 2)

I have more facts, but I did receive a call yesterday morning from one of the leaders of the House opposition to this bill, Delegate Harold K. Michael.

The call was unfortunately brief. He had a 9 am committee meeting to attend, and I had an important work-related meeting to go to.

In essence, Delegate Michael expressed his opposition to this particular bill on the basis of its being, according to him, am unwise, too-large tax hike (I think he said $147 million) at a time when the state economy is continuing to down-spiral alarmingly.

He said the unemployment fund needs to be shored up, and a tax hike certainly will have to be introduced, but he believes there are ways to do it with a smaller tax increase, one that can be worked out in a special session. He's concerned about the fiscal margins these days for everyone, especially small businesses in the state's rural areas, he said.

He said there are pots of money available for use by the state in the short term to address these problems until a better bill can be put together. One of those pots, he said, is the Rainy Day Fund, but there are others as well.

He would know. Delegate Michael, regardless of one's ideological leanings, is universally respected by everyone for his encyclopedic knowledge of state finances. He was, of course, the powerful chair of House finance (1997-2006) when the speaker was Bob Kiss. I probably

My work schedule is such that I may not be able to speak to Delegate Michael until much later today, but I'll see what I can do to get a fuller, more detailed critique from him in a timely way, Also, in the interests of fairness, I note that Del. Michael considers this bill to be the brainchild of the governor's administration, and everyone knows there is no love lost, politically or personally between the him and the governor. However, I'm also sure that his opposition to this bill is based on principle and not personal factors.

Other and unrelated news: Senator Byrd (fwiw, Delegate Michael is one of the many state leaders who has a longstanding personal friendship with the great man, who also served as his model as a lawmaker) will be in Green Bank today, to dedicate the breathtaking science education center at the National Radio Astronomy Observatory (NRAO). Senator Byrd will also observe the birthday of an old and dear lifelong friend of his, Emma Beard, a great Democrat who is turning 100!    

---

by: benjaminwalter @ Wed Apr 08, 2009 at 11:15:44 AM UTC

Can't Afford to Fiddle Around While Unemployment Fund Goes Broke (4.00 / 2)

Well, I had a lengthy comment, but it was eaten somewhere along the way.  

Basically, we can't afford to wait to fix this problem. First and most importantly, people depend on these benefits for their daily lives. Without action our system will be insolvent, probably before the end of the year. It's not a question of if, only when. No one is disputing this.  

Without action, the Fund will become insolvent and we'll have to borrow money from the federal government and pay interest on the loan. Ohio has already had to do so.  We had to do this in the late 1970's and early 80's too.  That's bad fiscal policy.

If we pass SB 246, we will solve both the immediate and long-term problems for the solvency of the Fund and draw down $11 million in federal funding through the federal stimulus.  A couple more changes and we could bring in a total of $33 million via the stimulus.  That's much better than doing nothing.

Also, the taxable wage base for unemployment insurance is $8,000, which is unchanged since 1981.  Meanwhile, benefits have increased by 119% since 1981.  We have kept up because our economy has grown, but we didn't generate any extra savings in case of a recession. Businesses have said they can't raise the rate during good times because it would hurt business. Now they say they can't raise the rate during bad times.  Personally, I don't think they'll ever think there's a good time even though everyone depends on a solvent unemployment system.

The proposed increase in taxable wage rate is only $10,000 in the Senate Bill and $9,000 in the House. That's hardly a 119% increase needed to meet 1981 levels. Yet, business leaders are still opposing the increase.

According to the WV Center on Budget and Policy the cost of the proposed increase is approximately $1 per employee per week ($54/year). While this is a modest increase, it's not enough for someone to relocate their business to another state. It will also likely be offset by the economic benefit that comes from expanding unemployment benefits.  As was discussed during the debate about the economic stimulus package, unemployment benefits are one of the most effective ways to stimulate economic growth.

I propose that businesses are trying to delay implementation as long as they can until later in the  year after they have paid unemployment insurance on the first $8,000 for their employees wages for this year. Remember, if someone earns more than $32,000 per year, then their employer will have paid the tax during the first quarter of the year.  This results in delaying their costs under the new legislation until next year.  Meanwhile, the Unemployment Insurance Trust Fund is growing closer to bankruptcy each month. The longer we wait to reform the system, the longer it will take for the increases to result in a better bottom-line for the Fund.

As a wise man reminded us this week, Nero reportedly played the fiddle while Rome burned around him. That's what many Republicans (and Democrats) are doing now.  We can't afford to fiddle around on an issue that's so important to so many lives.

In a good conversation everyone speaks.  In a great conversation some even listen.

---

by: Wabi-Sabi @ Wed Apr 08, 2009 at 23:14:19 PM UTC

[ Parent ]

Just spoke to... (4.00 / 2)

Del. Michael. The bill was improved in House finance.

From a $147 million tax hike (which was overwhelmingly on businesses rather than individuals) it's gone to $70 million in taxes.

Beyond that, the governor has agreed to provide $40 million from various sources (those aforementioned pots of money), including the insurance commission. Then there's the one-time only $11 million in stimulus unemployment dollars.

Most certainly, no one's willing to stand by and see the unemployment fund go broke.

As for the business taxes, well, there are businesses and there are businesses. For example, I work in a small business in a rural area (office staff of 4.5), and our margins are unbelievably tight these days.

Plus, there's the whole issue of raising taxes at the state levels in this economy. When it must be done, so be it. But...let's go slowly, especially these days, and especially on those least able to bear the burden.

Wabi, just an aside, I notice you reference the state Center on Budget and Policy. Good job. I for one take their analyses, recommendations and numbers very seriously.

 

---

by: benjaminwalter @ Thu Apr 09, 2009 at 01:20:18 AM UTC

[ Parent ]