February 5, 2010

Update: Senate committee seeks to resolve unemployment dispute

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By Andy Rosen
Andy@MarylandReporter.com

Lawmakers were pushing for a resolution on the dispute over an unemployment insurance reform plan proposed by Gov. Martin O’Malley, but they were still negotiating on Friday.

Many of the stakeholders still appeared far apart on aspects of the legislation, and one major component appeared to be off the table. The Daily Record reported that the bill would likely not move forward with an $83 million tax credit that had split the business community.

Senate Finance Chairman Thomas “Mac” Middleton, D-Charles, said Thursday there’s still work to do. The idea is to find an offset for $20 million in costs that a reform plan would place on the state’s strained unemployment fund.

“It doesn’t necessarily have to be dollar-for-dollar, but the consideration is a ballpark figure,” Middleton said of the $20 million yearly cost of the programs.

He said an agreement had to be in place quickly if the state is planning to reduce unemployment insurance rates this year, which would be part of the deal. New assessments go out to employers March 1. The elimination of the tax credit buys time for negotiation.

Almost all of the advocates support some part of the deal, as most businesses are looking for a measure that lets them spread out their liability. Some businesses have seen their unemployment costs triple as jobless claims have spiked.

Business and labor groups have been meeting in private this week to try to make a deal, but so far haven’t agreed on a package that adds up. Even business groups were split over the rate reduction for employers.

Negotiators have been tight-lipped about the specifics, but one component on the table appears to be an elimination of “sick claims,” which allow workers to suspend job searches and continue receiving benefits if they are ill.

Ronald Adler, president of the human resources firm Laurdan Associates and unemployment negotiator for the Maryland Chamber of Commerce, said the rate reduction amounts to a postponement of liabilities. Businesses would have eventually had to pay that back as the state’s unemployment fund becomes depleted.

But other groups waned the rate relief without the parts of the package that they oppose.

Businesses have been pushing for benefit reductions to offset a plan that would haul in $127 million in federal aid for the unemployment fund by expanding eligibility. Labor advocates are trying to minimize the impact on those already receiving benefits.

Bills have been introduced in both the House and the Senate that would offer other alternatives to the unemployment fund problems. One bill, sponsored by Del. Ron George, R-Anne Arundel, would eliminate the highest insurance rates for employers.

Ellen Valentino, Maryland director for the National Federation of Independent Business, said small employers also want some resolution to the matter as the long-term policy debate continues.

“I think it’s important that the issue and the debate come to a close to some extent, because business owners need to be notified by the state of the tax rate, and of certain payment options that we may be able to use,” she said.

A previous version of this story provided an incorrect party affiliation for Del. Ron George. He is a Republican.