For immediate release: Mar 23, 2009
Posted by: [Democrat.Senate]
Contact: Peg McLeish
Phone: 317-232-9507

Senate Democrats propose changes to unemployment fund plan

Senators stress opportunity to leverage federal unemployment dollars for Hoosier families

INDIANAPOLIS-Senate Democrats will propose a package of amendments today to House Bill 1379, a bill now moving through the Senate aimed at addressing an imbalance in the state's Unemployment Insurance Trust Fund. A dramatic imbalance in the reserves that pay for unemployment benefits has left Indiana borrowing more than $583 million from the federal government to cover benefit costs, and it's estimated that each month the state will continue to borrow an additional $150 million.


Senate Democrats say the plan proposed last week by Senate Republicans cuts benefits to laid-off workers, hurting Hoosier families and adding to the recession affecting our communities by significantly decreasing the weekly dollars provided to unemployed workers. According to State Senator Tim Skinner (D-Terre Haute), workers at every benefit level would receive fewer dollars under the Republican plan, but lower wage earners would be cut even more. Estimates indicate workers receiving the maximum level would see a 14 percent decrease in benefits, those at the average level would see a 27 percent cut, and those at the minimum level of only $50.00 per week would see a 21 percent decrease in benefits over the initial 26 week period. Skinner says he will offer an amendment to strike those changes.

The Republican proposal also ignores millions of federal dollars available to expand benefits to unemployed workers. State Senator John Broden (D-South Bend) says leveraging these dollars would put more money back into the local economies. Indiana could get at least $148.3 million for additional benefit payments, fully funded by the federal government, if two changes were made in Indiana's unemployment insurance laws. These dollars could benefit as many as 22,000 unemployed Hoosiers families who get nothing now, at a time when they need it the most.

Indiana would need to make two changes to receive additional federal funds:

Implement the Alternative Base Period, which allows workers to count more recent earnings on their claims, expanding the eligibility based on wage history.
Provide unemployment benefits to part-time workers.


A second pot of federal money would allow Indiana to extend benefits for workers who have the most trouble finding reemployment. Workers now receive state funded unemployment insurance benefits for 26 weeks. Under federal emergency unemployment provisions, workers could also receive 33 additional weeks of federally funded benefits, plus 13 weeks of extended benefits announced last week. The federal stimulus package would allow Hoosier workers who exhaust those benefits to access seven additional weeks, federally funded, through the end of 2009 if Indiana's total unemployment rate remains above 8 percent. In order to access the funds for the additional seven weeks, the state would need to change criteria for activating the federal "extended benefits" based on the total unemployment rate as opposed to the insured unemployment rate. Broden will offer amendments to enact these changes in Indiana law and allow the state to go after federal stimulus funds.

Three other measures will be proposed that would help balance the Unemployment Insurance Trust Fund by making employer contributions fairer and more palatable and by providing oversight commission to the fund to avoid future shortfalls. State Senator Karen Tallian (D-Portage) has proposed creating an oversight that would monitor the fund as well as an increase in the taxable wage base for employers to $10,500, instead of a one-time employer surcharge proposed by Senate Republicans. Tallian also proposes continuing a contribution that employers have paid annually through 2008 to provide a mechanism for paying back Indiana's federal loans.

In addition to amendments that would implement these proposals, Senate Democrats will also offer several amendments that address specific Republican proposals which would penalize workers for employer business decisions. In particular, State Senator Greg Taylor (D-Indianapolis) said Democrats reject changing the designation of seasonal work for employers that shut down for a period of 26 weeks to those that shut down for only 10 weeks. Such a move would disenfranchise hundreds of thousands of Hoosiers who are out of work through no fault of their own, particularly those working in industries that slow during difficult economic times.

For more information on the Senate Democratic Caucus or other business before the Indiana State Senate call -800-382-9467 or visit the website at


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