It was standing room only in the Senate Monday as unemployment legislation got a hearing.
OLYMPIA, Jan. 18.—Any doubt that unemployment insurance is one of the hottest topics of this year’s legislative session was dispelled Monday when the state’s labor unions called out the troops and packed a Senate hearing room with hundreds of their members.
Unions are saying that if business gets a $300 million tax break on unemployment insurance this year, they want to expand the program and provide additional benefits to families with dependent children. The tax break isn’t the only thing at stake – also at issue are “extended benefits” for some 70,000 Washington residents that will end if the Legislature takes no action.
Business and labor are saying they want an agreement on the whole deal before anything moves forward. And because lawmakers face a Feb. 8 deadline to make changes to unemployment taxes, there’s a whale of compromising that must take place in just three weeks.
Big Crowd is Big Difference
It was the second hearing on the issue – another took place in the House last week – and there weren’t any new arguments introduced during the session before the Senate Labor and Commerce Committee. In fact, Sen. Jeanne Kohl-Welles, the chairwoman of the committee, told her members not to ask any questions as more than 50 people trooped to the front of the room to testify over the course of two hours. “We’re familiar with the arguments already,” she said.
But as always at the statehouse, what is said in a legislative hearing wasn’t quite as important as the way people say it. The fact that the unions brought in hundreds of people – so many that large numbers of people were not seated and had to wait in the hallway – underscored that the dependent-child benefit is a do-or-die issue for labor.
Said ironworker Chris Hanson, a father of four, “The fact of the matter is that $15 we can earn for each child is going to help to feed our kids and make sure we have the gas to look for a job. Right now is when we need help.”
Meanwhile, business interests appeared to take a more consistent line than they did last Friday. They said they are adamantly opposed to the new benefit, which ultimately would mean higher taxes for employers. But they said they could accept a slightly less costly expansion of benefits favored by the governor, which would provide continue unemployment benefits while workers are enrolled in job-retraining programs.
The Feb. 8 deadline gives lawmakers and business and labor interests three weeks to find a compromise.
A Plea to Keep Things Simple
Things seemed a little simpler when Gov. Christine Gregoire proposed the changes to the unemployment insurance program last month. The deal has so many parts that she suggested taking care of it with a pair of bills, and leaving the most controversial parts for later. The most urgent part is the tax reduction. Because of recession and a state formula that has built up a large balance in the unemployment insurance trust fund, employers will face an average tax increase of 36 percent this year, and many employers who laid off large numbers of employees will face much larger tax increases. The state has to act quickly because tax notices already are being sent to employers, and the first-quarter tax payments are due April 1.
“We decided that because of the complicated nature and the discussions that tend to be prolonged around unemployment insurance, that it was important to take action on the first bill as quickly as possible,” said Peter Bogdanoff of the governor’s office.
At the same time, the state needs to tweak a formula in the law that allows the state to receive federal money for extended unemployment benefits. Otherwise benefits for thousands of workers will end in spring.
But for reasons of political leverage, labor and business groups say they want an agreement on the whole package first.
Business Supports Governor’s Plan
The hitch is this. The state also wants to collect a one-time $98 million payment from the feds that is being given to states that “modernize” their unemployment programs by choosing some type of benefit expansion from a federal list. The governor says the state ought to pick a job-retraining benefit, and business groups say they’ll reluctantly support her on that one. The problem is that a permanent increase in benefits means a permanent increase in the taxes that will be paid by employers. But this year, unlike previous years, they say it’s a trade-off they’re willing to accept.
Business groups made their support perhaps a trifle more clear than they did at the last hearing.
“We have to say that it is tenuous support for the training benefits,” said Nancy Hiteshue of the Washington Roundtable. “Any other expansion of additional benefits we would have to oppose.”
Labor Groups Declare Opposition
Meanwhile, labor groups made it just as clear that they oppose the governor’s approach. The dependent-child benefit also would qualify Washington for the federal money. It would provide $15 a week to unemployed workers for each child in their household, for up to $50 a week. They say the benefit would make a much bigger difference, aiding 170,000 families rather than the 2,000 workers that would be helped by the retraining benefit.
“The governor’s proposal has a low impact, while our proposal provides help to 170,000 families. This session is going to be bleak in many ways, and we encourage you to help Washington families,” said Rebecca Johnson of the Washington State Labor Council.
The trouble? The dependent-child benefit would cost nearly twice as much, at about $37 million a year, and also would force the state Employment Security to pay additional administration costs. Many in the employer groups complain that a similar worker-comp benefit has proven a nightmare for the Department of Labor and Industries to administer.
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