(Host) Vermont could be forced to borrow as much as $200 million this year to keep its unemployment insurance fund solvent.
But Senate President Peter Shumlin says he believes a compromise will be found with the Douglas administration to shore up the fund.
VPR’s Bob Kinzel reports.
(Kinzel) The state’s unemployment fund has been hit hard in the past two years because of layoffs caused by the recession. There’s no money left in the fund and the state is borrowing $4 million a week from the federal government in order to meet its obligation to pay out unemployment benefits.
Senate President Peter Shumlin, House Speaker Shap Smith and Governor Jim Douglas have been meeting to try to hammer out a compromise.
Speaking on VPR’s Vermont Edition, Shumlin said he’s optimistic that an agreement can be found but he says it’s not going to be popular:
(Shumlin) "The challenge is that nobody’s going to like the solution, so politicians don’t like to vote on issues where there’s only pain to go around. What we’re trying to find is a balance between not overburdening our businesses that are struggling in these economic times and still maintaining the benefits for the unemployed…So this is the line that we’ve drawn – we will not lower the maximum weekly benefit from $425 a week, we just won’t do it."
(Kinzel) But Shumlin says there are ways to reduce spending on overall benefits by imposing a waiting period or adjusting the formula that’s used to determine benefit levels:
(Shumlin) "There are ways that one could "reduce benefits" without reducing the $425 a week and we’re willing to look at some of them but obviously the balance needs to be found."
Shumlin says increasing the income level on which employers pay unemployment taxes should be part of the package. He says these levels were raised slightly last year but he notes that there hasn’t been a major increase since the early 1980s.
But he says he won’t support a plan to include an income tax surcharge on all employees as part of the agreement:
(Shumlin) "It basically says we’re going to impose a tax on every working Vermonter for the problems that have been created because business didn’t have their premiums increase for 30 years…Many of us should have gone ‘isn’t it funny that our rates haven’t changed in 30 years’. And yet obviously inflation does and benefits go up, so we all made a huge mistake. We’ve got to fix it together but we shouldn’t do it on the backs of all Vermonters."
(Kinzel) Shumlin says he hopes to have a final agreement in place in the next week or two.
For VPR News, I’m Bob Kinzel in Montpelier.