DWD support lukewarm for employer tax fix bill

(WISH Photo, file)

INDIANAPOLIS (WISH) – A bill that could help cut out a growing tax hike hitting Hoosier businesses got lukewarm reception from a key voice on the issue Monday. Department of Workforce Development Commissioner Scott Sanders told I-Team 8 he’s not convinced the plan is the state’s best move.

Last month, I-Team 8 reported  that businesses across Indiana are now being impacted by an increase in the Federal Unemployment Tax —or FUTA.

Since 2009, Indiana has been borrowing money from the federal government in order to continue paying its unemployment claims. The Department of Labor now lists the state’s debt at nearly $1.8 billion.

A bill introduced in late January by Senator Karen Tallian (D-Portage)would authorize the state to issue bonds in order to reduce that tax burden. Senate Bill 541 would use that money in order to pay the debt off and eliminate the federal government’s tax penalty on businesses.

Six other states—Idaho, Kansas, Texas, Illinois, Michigan and Pennsylvania—have already taken that approach.

But, not all lawmakers believe the approach would end up saving Hoosier employers any money in the long run.

On Monday, Sanders told I-Team 8 he’s not convinced either way.

“At this point, our agency continues to look at all options, which is what I believe the legislative body continues to do. But, I believe she may have filed that bill last year as well, potentially as the year before when HB 1450 was actually passed. So, we’ll continue to look at that and hopefully make the right choices for Indiana employers,” Sanders said.

Asked if DWD was open to the idea of issuing bonds, Sanders nodded.

“We continue to look at it and always forecast out what we believe our unemployment insurance debt will be, as well as payments received by employers. So, I think we’ll continue to analyze it,” he said.

Tallian’s bill was referred to the Senate Appropriations Committee, but has not been scheduled for a hearing.


Also Monday, the agency said it has completed work on a project to upgrade computers running the state’s unemployment filing system.

Documents obtained last month by I-Team 8 show the state signed another $6 million contract extension with California based Haverstick Consulting on the project in December, bringing the total cost of the project to nearly $52 million as it approaches five years past its original completion date. The cost overruns have now reached more than twice the original $24 million budgeted for the work.

Just two weeks ago, department spokesman Joe Frank told I-Team 8 that the project had not been completed yet, and that DWD had no timeline for completion of it. On Monday, he said the work is now done.

“The contracts with Haverstick have been fulfilled,” Frank said. “All we’re doing now is basically like Microsoft does with Windows. When there’s an update needed, we put out a new update to the software.”

Pressed on the need for the new $6 million contract that lasts through the end of 2013, Frank again said the work was completed.

“All contracts that we had outstanding have been executed,” he said. “As far as I understand from our agency, it’s been executed.”

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