An ad hoc coalition of business groups formed last week to support S.290, a bill sponsored by Sen. Bill Carris, Sen. Hinda Miller and Sen. Vince Illuzzi, that calls for significant reforms to Vermont’s Unemployment Insurance Trust Fund, which went bankrupt at the beginning of the year.
Last week, representatives from the Vermont Chamber of Commerce, Vermont Businesses for Social Responsibility, the Vermont Retail Association, the Vermont Grocers Association, the Associated Industries of Vermont, and the state’s banks all stood together at a press conference in support of higher unemployment taxes — a bitter dose of medicine for the state’s businesses, they acknowledged — because they stand to pay more in federal taxes over the long haul if the state continues its deficit spending trajectory.
S.290 not only calls for unemployment tax increases for businesses, it also imposes a number of restrictions on unemployment benefits and a two-cent payroll tax on employees for every $100 earned (about $80 a year for a worker who earns $40,000).
The state borrowed $58 million from the federal government to pay benefits to unemployed workers at the beginning of the year to cover an ongoing deficit, which is expected to balloon to $90 million by the end of the year and to $300 million by 2014, according to Patricia Moulton Powden, commissioner of the Department of Labor, if nothing is done to bring the fund back into the black very soon.
Illuzzi says, “If the General Fund was expected to be in the read to the tune of $284 million, there would be alarm bells going off all over the place.”
In fact, Vermont’s General Fund was in trouble this year — the state faced a deficit for fiscal year 2011 of $154 million, and the budget and Challenges for Change bills passed by the House resolve all but about $35 million of the shortfall. (Next year, the Legislature and the new governor will have to find $100 million in additional General Fund savings.) Senate President Peter Shumlin has said the Legislature will balance the budget before adjournment (the House Challenges bill included a provision for a special session if the Senate doesn’t fill the budget gap). Burlington Free Press reporter Nancy Remsen wrote yesterday that a May 9 adjournment is likely.
The unemployment trust fund is the next big hurdle faced by the Legislature and the administration. Gov. Jim Douglas, House Speaker Shap Smith and Senate President Peter Shumlin met last Friday to discuss the options for restoring the fund. They have not yet resolved their differences. An announcement regarding plans to fix the fund is expected this week.
Youtube clips follow of Michael Seaver of Chittenden Bank, Illuzzi, Will Patten of VBSR, Betsy Bishop of the Chamber and a question-and-answer session with reporters.
Last week, representatives from the Vermont Chamber of Commerce, Vermont Businesses for Social Responsibility, the Vermont Retail Association, the Vermont Grocers Association, the Associated Industries of Vermont, and the state’s banks all stood together at a press conference in support of higher unemployment taxes — a bitter dose of medicine for the state’s businesses, they acknosledged — because they stand to pay more in federal taxes over the long haul if the state continues its deficit spending trajectory.
S.290 not only calls for unemployment tax increases for businesses, it also imposes a number of restrictions on unemployment benefits and a two-cent payroll tax on employees for every $100 earned (about $80 a year for a worker who earns $40,000).
The state borrowed $58 million from the federal government to pay benefits to unemployed workers at the beginning of the year to cover an ongoing deficit, which is expected to balloon to $90 million by the end of the year and to $300 million by 2014, according to Patricia Moulton Powden, commissioner of the Department of Labor, if nothing is done to bring the fund back into the black very soon.
Illuzzi says, “If the General Fund was expected to be in the read to the tune of $284 million, there would be alarm bells going off all over the place.”
In fact, Vermont’s General Fund was in trouble this year — the state faced a deficit for fiscal year 2011 of $154 million, and the budget and Challenges for Change bills passed by the House resolve all but about $35 million of the shortfall. Senate President Peter Shumlin has said the Legislature will balance the budget before adjournment (the House Challenges bill included a provision for a special session if the Senate doesn’t fill the budget gap). Burlington Free Press reporter Nancy Remsen wrote yesterday that a May 9 adjournment is looking more likely.
The unemployment trust fund is the next big hurdle faced by the Legislature and the administration. Gov. Jim Douglas, House Speaker Shap Smith and Senate President Peter Shumlin met last Friday to discuss the options for restoring the fund. They have not yet resolved their differences. An announcement regarding plans to fix the fund is expected this week.
Youtube clips follow of Michael Seaver of Chittenden Bank, Illuzzi, Will Patten of VBSR, Betsy Bishop of the Chamber and a question-and-answer session with reporters.
