Indiana News

Statewide Reaction Mixed to Probable Signing of Unemployment Bailout

5/13/2009

Hoosier businesses have mixed reactions to the $700 million bailout for the state's unemployment trust fund being signed into law today.

The Indiana Chamber lobbied hard against the bill and has blasted it as a massive tax hike that will cost jobs.

But the National Federation of Independent Business, which represents the smallest companies, is pleased lawmakers agreed to cut tax rates for companies who don't have layoffs. Member services director Brian Christenberry says that description fits most NFIB members.

"We feel people use the unemployment trust fund as part of their business plan, (for) regular layoffs, seasonal workers, temporary layoffs, temporary furloughs," Christenberry says. "We just don't think we should pick up the tab."

The bill cuts the lowest tax rate, for employers who never have layoffs, by .35%. It also increases the taxable wage base, but it appears companies in the bottom bracket would enjoy a tax cut of $5.75 per worker.

Christenberry says the NFIB is awaiting final numbers from the state, but expects its members will see either a tax cut or no change.

Like the Chamber, the NFIB acknowledged early on that some tax increase would be necessary. Christenberry says NFIB members were willing to support that as long as the new tax grid distributed the burden fairly.

The Chamber says the bill flunked that standard. And even small businesses aren't unanimous -- a Chamber statement quotes the owner of an unidentified six-worker business in South Bend as saying he's prepared to hand legislative leaders the keys to his company if Governor Daniels signs the bill.
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