The Indiana General Assembly faced tough challenges and great opportunities going into this legislative session. However, the session left us with disappointment and missed opportunities.
Passing an unemployment insurance bill that will cause $700 million in tax increases for Hoosier businesses over the next two years, to me, is unacceptable. The unemployment insurance bill raised the wage base from $7,000 to $9,500, which will cause a $650 million increase in state taxes on employers. Add to that $50 million in federal tax increases on Indiana employers in 2010 — from reduced federal unemployment tax credits to employers — to total $700 million in tax increases for Hoosier businesses.
At a time when Indiana’s unemployment rate has reached double digits, we should be putting Hoosiers back to work, not taxing Hoosier employers to the point where they cannot create jobs.
Forget creating new jobs; by raising employer taxes as much as 150 percent for more than 100,000 Hoosier businesses, we will force employers to lay off employees — and that is unacceptable.
I voted against this legislation because I believe it will do more harm than good to an already suffering Indiana economy and will prevent Hoosier business from putting Hoosier employees back to work.
Indiana needed an unemployment insurance fund that would serve both parties facing the issue — those who pay into the unemployment trust fund and those who receive the unemployment benefits.
Not to forget, House Republicans were not included in important negotiations during conference committee in the final days of session. We had ideas to make the bill better, but our opinions simply were not heard by the majority.
The House speaker went so far as to remove our House Republican conferee for the bill, who had been closely following this issue all session, and replace him with a House Democrat conferee. The unemployment insurance bill passed with a party line vote.
What was even more unacceptable was the failure to craft and pass a frugal, biennial budget in the face of a recession.
The final budget, proposed in the waning moments of the session, was far, far short of what I hoped it would be. Honestly, Hoosiers deserved better.
The budget, which failed in the House by a 27-71 vote, would have wiped out the state’s reserves, created a structural deficit of more than $800 million for the next budget cycle, misused the one-time federal stimulus money and led Indiana to a tax increase within two years.
I understand that a budget was our No. 1 responsibility this session, but I could not support a budget that would raise taxes and lead Indiana into the red, and many of my House colleagues agreed. So now, we are in a special session that begin Thursday.
I can assure you that no one wanted a special session. However, the opportunity of special session gives us a second chance to establish a balanced budget.
My expectations for special session are the same expectations I had at the start of the original session. Legislators have to come to a consensus in a common-sense manner that Hoosier taxpayers expect to pass a budget that will protect Hoosier taxpayers, use stimulus money responsibly, provide adequate funding for education and not send Indiana off a cliff in two years.
Hoosier taxpayers, especially taxpayers in House District 33, have overwhelmingly agreed that we need to work within fiscal constraint in order to make sure we pass a budget that doesn’t cause a tax increase in a time when we are losing jobs.
We have the ability to do exactly that, we just need the will from everyone involved. All four caucuses and the governor have to come ready to work together in order to help Indiana. The governor announced his budget proposal recently, which will give the Indiana General Assembly a roadmap to establish a fiscally sound budget that will keep Indiana moving forward during these tough economic times.
His proposed budget does not impose any tax increases on already struggling Hoosier families and businesses nor does it include any cuts to public education or public safety. The only increases in the budget are for both K-12 education and student financial aid, making Indiana one of only 15 states to avoid cuts in education funding.
His budget also proposed thousands of jobs for hard-working Hoosiers by investing more than $450 million in capital projects for higher education, in addition to $1 billion in road and bridge projects.
Furthermore, the budget spends the state’s reserves and stimulus money wisely, with the understanding that Indiana could face more difficult times down the road.
I applaud the governor for his efforts and hope all four caucuses will come together over the next month and pass a budget we can all support.
I encourage constituents to contact me with questions or concerns by e-mail at email@example.com, by phone at (800) 382-9841 or by writing me at the Statehouse, 200 W. Washington St., Indianapolis, Ind. 46204.
If you are interested in receiving my weekly eNewsletter, you can sign up at www.in.gov/h33. State Rep. Bill Davis represents District 33 in the Indiana House.
Posting the column is not an endorsement of the MunciePolitics blog. It is for informational purposes only.
Thanks to Mr. Davis for permission to post his letter.