Riding a hot streak of economic success (per Gov. Daniels), Indiana’s trust fund for jobless benefits is running out, and Indiana is seeking a loan from the federal government to cover the unemployment benefits.
The state will have to borrow the money by the end of this year or early next year, said Scott Sanders, chief financial officer at the Department of Workforce Development.
That’s because more money is going out in unemployment benefits than is coming in from business taxes, an imbalance that began in 2000, when the year-end balance was $1.6 billion.
Indiana is one of five states with insolvent unemployment insurance trust funds. The others are Ohio, New York, South Carolina, and Michigan. Indiana has $91 million in the bank with average monthly benefits of $66 million.
The news of the deficiency in unemployment funds juxtaposed with all I’ve been hearing in the recent political campaign about the relative strength of Indiana’s economy reminded me of a bit from Monty Python’s “The Meaning of Life.” (Confirmation, as if any were needed, that I am in fact a nerd.) It’s in the bit immediately following the “Every Sperm is Sacred” musical number.
Dad: So you see my problem, little ones… I can’t keep you here any longer.
Shout from the back: Speak up!
Dad: [raising his voice] I can’t keep you here any longer… God has blessed us so much that I can’t afford to feed you anymore.
Lawmakers will be looking at ways to fix the problem. (Probably something that should have been fixed long ago — I’m sure there is plenty of blame to go around on that score.)
Rep. Randy Borror, R-Fort Wayne, said the trust fund will likely be a contentious topic for lawmakers in January. Although the options seem simple — reduce benefits or raise taxes on businesses — there are many ways within the system to achieve both.
For example, legislators could limit who is eligible for unemployment rather than cut the maximum weekly benefit of $390. Or the General Assembly could raise the taxable wage base on which employers pay. The state is at the federal minimum of $7,000 while the national average last year was $13,855.
Or the governor could cut the crap and create more jobs. It’s a shame that Jill Long Thompson ran such a bad campaign, because Hoosiers have really screwed themselves by splitting the ticket.
Let us not forget those who have lost jobs but not qualified for unemployment. Then there are the folks who are under-employed…
Hey, big surprise! A government insurance scheme that is failing? Never happens- not with Social Security, not with this…
And Steph- governments don’t create jobs. They can assist in attracting those who might create jobs, by making their business climate more friendly (by lower taxes, reducing pointless regulation, making the state more friendly to a more diverse workforce, etc., relative to a neighboring state or country). For instance, I would much sooner launch a business here in Indiana than in Ohio or Illinois, but would again sooner launch one in Nevada than Indiana.
You might be tempted to say that government creates jobs with its various bureaucracies, but those jobs are virtually pure overhead, with nothing produced to add to GDP, and are funded at the expense of production, which means fewer jobs in the private sector. Asking JLT to create jobs for Indiana would have been as disappointing to you as waiting for Obama to create jobs nationally will be.
Government certainly produces some things that add to our production capabilities — roads, bridges, dams, drainage ditches, courts, and schools come directly to mind.