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Deadline Day Comes and Goes With Brinksmanship on Unemployment Bill – House May Do Battle Wednesday

Article by Erik Smith. Published on Tuesday, February 10, 2011 EST.

Tax Break for Thousands of Businesses Hangs in the Balance – Thousands of Workers Could Lose Benefits, Too

 


State Rep. Mike Sells, D-Everett, chairman of the House Labor and Workforce Development Committee.

By Erik Smith

Staff writer/ Washington State Wire

 

OLYMPIA, Feb. 8.—Lawmakers blew a Tuesday deadline to pass an unemployment-insurance bill that would have staved off a crippling tax increase that hits Washington businesses on April 1.

            But lawmakers say they think they can push things a bit – and there is likely to be a showdown on the House floor Wednesday.

            They’re counting on the idea that the state Employment Security Department may still have enough time to recalculate tax bills for some 170,000 employers across the state.

            “We’re trying to work on a compromise that makes everyone happy,” said state Rep. Mike Sells, D-Everett, chairman of the House Labor and Workforce Development Committee.

            “I’ll let you know when it’s over.”

            Rumors swept the statehouse that House Democratic leaders are attempting to forge a last-ditch compromise between business and labor groups on the biggest issues surrounding unemployment insurance.

            That would counter the Senate, which wasn’t quite so interested in making labor and its allies happy. It passed a bill Friday that had been proposed by Gov. Christine Gregoire, pleasing business organizations but leaving the other side seething.

Lobbyists and lawmakers were huddling behind closed doors Tuesday afternoon, and details were so fluid that it seemed hardly any of the players were returning phone calls.

            As often happens in the Legislature, this one is coming down to the wire.

 

            Biggest Issue of the Session – So Far

 

            Unemployment insurance has emerged as the hottest topic of the early weeks of the 2011 Legislature. The tax break isn’t controversial. It would cut a 36-percent tax increase down to about 5 percent. But business and labor are doing battle over another unemployment insurance proposal, and it’s the sort of issue that normally would take weeks to resolve.

That proposal would expand benefits for unemployed workers. Business and the governor favor one approach, and labor favors a benefit that would cost employers about twice as much.

            The immediate dispute involves a complicated bit of political gamesmanship regarding the initial unemployment bill. Its structure will determine whether business or labor has the upper hand in negotiations later in the session. If no bill passes quickly, it’s likely that everything will fall apart – the tax break and everything else.

            Caught in the middle are 70,000 long-term unemployed workers who currently receive or will receive extended unemployment benefits. The state needs to make a tweak to the law that would allow it to receive additional federal money.

            If no unemployment bills pass this session, those workers would be cut off.

 

            Hell To Pay

           

            Rumors swirled Tuesday that House Democratic leaders had assembled a package deal on all three big issues and were set to spring it on their members Wednesday morning for a vote on the floor. Leaders were trying to build support for it Tuesday, sounding out key players and lobbyists for various interest groups.

            The proposal was said to include an entirely different benefit expansion than has been proposed by any party this session.

            It also was unclear how much longer the Employment Security Department can wait. The governor had said earlier that the Feb. 8 deadline was hard and fast, but experienced Olympia hands said tax changes often can be pushed a few days longer. A spokesman for the Employment Security Department could not be reached Tuesday.

            “The governor hasn’t thrown in the towel,” said Gregoire spokeswoman Karina Shagren.

            If everything falls apart, there’s going to be a blowup like you wouldn’t believe, said state Rep. Cary Condotta, R-Wenatchee, the ranking Republican on the House labor panel.

            “If we miss that and the wheels fall off, there will be a complete meltdown,” he said.


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