(Host) Lawmakers have so far failed to craft a compromise on how to shore up the state’s unemployment fund.
If the Legislature can’t find a fix this year, the state will have to borrow more money from the federal government to pay jobless benefits.
VPR’s John Dillon reports:
(Dillon) The unemployment fund is a lifeline for laid-off workers. But the fund ran out of money last month, forcing the state to get a line of credit from the federal government.
Governor Jim Douglas says the Legislature should not adjourn without addressing the fund deficit.
(Douglas) "No action was taken last year and as a result we’ve had to borrow $28 million more than we otherwise would have from the federal government in order to pay benefits last month. If we don’t do something now, we’ll have to borrow $100 million more than we otherwise would have over the next few years. So doing nothing is not an option."
(Dillon) But fixing the problem has proven politically difficult. A bill pending in the Senate includes a tax on employees, a hike in business payments, and a reduction in benefits.
Essex Orleans Senator Vince Illuzzi – the chairman of the Economic Development Committee – says his bill spreads the pain.
(Illuzzi) "The bill is a tough bill on everybody; it’s tough on employers; it’s tough on claimants and it’s somewhat tough on people who are lucky enough to still have a job in Vermont, noting that tomorrow they may be the one without a job and may be depending on a bankrupt system."
(Dillon) But Governor Douglas doesn’t like the payroll tax provisions on employees. And neither do many Democrats. Speaker Shap Smith says the tax piece is a non-starter in the Democratically controlled House.
(Smith) "In discussions with a number of members of the House, I don’t believe that that could get support in the House."
(Dillon) Smith said he and other legislative leaders have been negotiating with the governor to break the impasse. Smith says he’s willing to change how benefits are calculated in order to cut costs and get people back to work. But he says he’s ready to wait another year if a compromise can’t be reached.
(Smith) "We’re not going to pass an unemployment insurance bill at any cost. We’ve put a number of ideas on the table to address the concerns that the governor has raised. And none of the ideas that we’ve put on the table have gone far enough for him. And we don’t feel that there has been movement on the part of the administration to get closer."
(Dillon) William Driscoll of the business group Associated Industries of Vermont says a delay makes the problem harder to solve next year.
(Driscoll) "The pressures on reducing benefit spending and the pressures on increasing taxes are only going to be worse on both directions. So if people are uncomfortable with the solutions this year, it’s only going to get worse next year. … It’s going to be a painful process no matter what we do, when we do it, so the sooner the better."
(Dillon) And even if the Legislature approves the bill pending in the Senate, the unemployment trust fund would not be back in the black until 2014.
For VPR News, I’m John Dillon in Montpelier.