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Vermont May Up Taxes For Unemployment

From Vermont’s Times Argus:

Ben Cohen, left, and Jerry Greenfield, right, co-founders of the Ben & Jerry ice-cream company, pose in central London, Wednesday Feb. 17, 2010.

New tax on workers part of proposed unemployment fund fix

By Peter Hirschfeld
February 21, 2010

MONTPELIER – A state Senate committee has approved legislation that would see hundreds of thousands of Vermont workers pay an additional $100 million in new payroll taxes over the next four years.

The employee tax – already dubbed the "working families tax" by one Democratic gubernatorial candidate opposed to the idea – is the most controversial measure in a bill aimed at replenishing the state’s bankrupt unemployment trust fund.

But the 0.2 percent surcharge on paychecks – $80 a year for someone making $40,000 – is just one of a slew of new financial burdens that would hit employers, workers and unemployment beneficiaries.

"It’s a tough bill," said Sen. Vince Illuzzi, chairman of the Senate Committee on Economic Development, which approved the legislation in a 3-2 vote late Friday. "I wish I wasn’t in the position to be on record to launch it and begin the contentious debate that will follow."

A 60 percent increase in the portion of each worker’s wages on which employers are taxed would see Vermont businesses pay an additional $200 million into the unemployment fund over the next four years. And benefit reductions – achieved primarily by instituting a one-week waiting period for new claimants and changing the formula used to calculate benefits – would amount to more than $100 million over the same period.

The bill is far from a done deal. The 3-2 committee vote – the panel’s first split decision on a "major" bill, Illuzzi said, since 2005 – reflects deep divisions in the Legislature over how to solve a crisis that could see the unemployment fund run nearly $300 million into the red by 2014.

Rising unemployment rates in Vermont rapidly drained the fund, which saw a $300 million balance in 2001 evaporate during the recession. Earlier this month, the fund hit a zero balance, forcing the state to get a credit line of $58 million from the federal government to pay the more than $4 million it sends out weekly in unemployment benefits.

Barring any changes, says Commissioner of Labor Patricia Moulton Powden, Vermont is on course to borrow $284 million from the feds by 2013.

Vermont incurs a number of financial penalties by borrowing. Interest on the loans – $5.8 million in fiscal year 2011 alone – will have to come from the General Fund, which is already struggling to meet the demands of critical programs and services. And the federal government imposes new tax penalties on employers in states with negative-balance funds – penalties that could run in excess of $24 million annually by 2013.

The specter of interest payments and higher federal taxes, Illuzzi and Moulton Powden say, means Vermont must act quickly to restore the fund to solvency. The Senate plan gets the trust fund back in the black by 2014 – an even more aggressive schedule than under the Douglas administration plan, which achieves solvency by 2015.

But the more quickly Vermont restores the fund, the more financial pain for businesses, employees and beneficiaries…

The bill would calculate benefit rates based on the last four quarters of work, rather than the two-quarter threshold used in current law. The change, drafters say, is intended to decrease benefit levels for seasonal workers who know ahead of time that they won’t be working for long periods of time. The provision would save the state nearly $10 million annually. But Curtis says that measure, combined with the one-week waiting period, unfairly targets out-of-work residents struggling to meet their most basic needs.

Administration officials and the business lobby see things far differently. Under the Senate plan, they say, businesses already would see per-employee unemployment obligations rise from $256 in 2009 to $680 in 2014. In lieu of the so-called worker tax, Moulton Powden says, Vermont should cut maximum weekly benefits to $400, from the current $425…

U.S. Rep. Peter Welch has proposed pending legislation that would forgive interest payments on federal unemployment loans. And some observers believe the widespread nature of the problem – 40 states are likely to see their unemployment funds run into the red in coming months and years – could compel the federal government to waive tax penalties and other financial impositions associated with borrowing. Those changes, Curtis says, would make longer-term borrowing more fiscally palatable than the aggressive measures in the Senate bill.

Certainly Vermont would never consider lowering taxes to attract more businesses to the state, which would mean more jobs.

Where is the social justice in that?

This article was posted by Steve on Sunday, February 21st, 2010. Comments are currently closed.

17 Responses to “Vermont May Up Taxes For Unemployment”

  1. proreason says:

    We are lucky that there is one abosutely infallible indicator of what to do in life.

    If a progressive recommends something, do the opposite.

    It works every time.

    • jobeth says:

      Great! I’m going right out to find one to give me the lottery numbers. Then pick the ones they didn’t give me. Hope it works…lol

  2. swee says:

    Vermonters strike me as an odd bunch. They pride themselves on their independence and eccentricity. Yet they don’t get they need industry in their state to keep costs low and retain their way of life. Soon it will be so expensive to live there even the legendary, grizzly residents who’ve lived in Vermont for generations will move away.

    • JohnMG says:

      Isn’t their motto “Live free–or die”?

      Just like that Obama supporter who “won’t have to buy gas for my car, or pay for……”

      Maybe the Vermonters just mis-understood their own motto. Or……maybe the rest of us did. Free stuff is good, right?

    • jobeth says:

      “Live free or die” does take on a whole ‘nother meaning if you read it right (or actually wrong as I don’t think the founders meant it like that)

      You are truly profound John…Never looked at it like that…lol

    • Steve says:

      “Isn’t their motto “Live free–or die”?”

      You’re off by one state. That is New Hampshire’s state motto.

      New Hampshire has no state income tax or sales tax.

      Consequently, most Vermonters work in New Hampshire.

  3. GetBackJack says:

    Social Justice

    Let’s never forget that at the bottom of all ‘justice’ movements by whatever ‘name’ or ‘label’ they adorn themselves, we discover the Jesuits.

    Whether it is the term ‘social justice’ itself or the Global Justice Movement, or People’s Global Action, Via Campesina, Third World Network, Jubilee 2000, Friends of the Earth, Global Citizens Movement, World Social Forum or the grand daddy of them all Liberation Theology or any of the nearly 1,000 ‘justice’ movements we find the root stock is Jesuit.

    Social Justice means Jesuits who are preaching not the Gospel of Jesus Christ but the secular materialism of redistribution to fix the body in order that the soul can be healed. Completely, one can say satanically, bass-ackwards.

    Jesuit capacity to form grass root movements which are virtually impossible to identify as their handiwork is rivaled only by their interbred cousins the Progressives of the Democratic Party. And believe me, cross-pollination in these fetid seed stocks is practiced.

  4. bousquem says:

    I’m living right now in VT, near Burlington for my pharmacy college rotations. I previously spent 3 months this summer in the Rutland area. It seems to me that alot of native Vermonters are very indpendent people, I rememeber seeing a couple of tea party rallies in Rutland and Howard Dean getting boo’d out of the local park where he was suppose to speak. Talking with my preceptors who were mostly local independent pharmacy owners, they really hate the democrats and the rest. They are having a hard enough time as it is trying to survive in the current times, all the taxes are really hurting them. The idiots who give vermont a bad name are the ones who come here to retire or make a business from other liberal bastions in the country and try and impose their ideas on everybody else.

    • JohnMG says:

      That still doesn’t explain Bernie Sanders and his Socialist self-identification. They keep re-electing him. Maybe it’s just that tendency toward contrariness. Whenever I hear of that “stubborn independence” being hearalded as a virtue, my mind conjures up visions of Jeff Dunham’s “Walter”.

    • proreason says:

      I think it’s brainwashing by the mediaeducation complex in New England. The people in Massachusetts are also personally conservative, yet they have voted as communists for decades.

      A good friend lives there and he might as well be a robot. The nonsense is so deeply ingrained in his brain that it can’t be scrubbed out. Of course, he fancies himself an intellectual and environmentalist (of the variety that thinks the world population needs to be cut in half, NOW). If the SlimesGlobule were to declare that farts smell like perfume and protect the environment, he would be onboard for the sniffing team. Oh….. except for one thing. He is due for a big inheritance and is somehow adamently opposed to taxing THAT. Shocking, isn’t it?

    • jobeth says:

      The progressives have used such pretty flowery language to dress up their agenda for so long they have accomplished their goal to make robots out of people…or AKA useful idiots.

      For example,
      You have to admit…the word fairness (as in fairness doctrine) sounds so right. And the useful idiots go no further than the title. “must be alright…look at it’s name…don’t need to bother actually looking into the facts”

      The same concept goes for all the other ‘nice’ plans they have for America’s “poor and victimized”.

      I’m telling you we need to start waking these people up. I say we begin to force feed these folks with a few facts. Leave them with something to think about…even if they don’t go below the fold for their info…or past late night comedians.

    • Steve says:

      “It seems to me that a lot of native Vermonters are very independent people…”

      I’ve happened to spend a lot of time in Vermont in the last few years.

      I have been amazed to hear how conservative even the most self-styled liberal among them are — when you talk to them about their private life and choices.

    • proreason says:

      “I have been amazed to hear how conservative even the most self-styled liberal among them are — when you talk to them about their private life and choices.”

      That’s my observation as well. Yet they vote communist.

      It’s why I think so many are brainwashed zombies when it comes to politics.

      My friend in Massachusetts HATES Sarah Palin with a blind passion. Nearly as much as he HATED George Bush. When asked why, he cites a clip he saw of Palin talking to a Christian women’s group in the south. He was appalled. They were talking like women, instead of policy wonks. . He doesn’t know what her views are. He doesn’t know what she’s done in her life. He just HATES her. (and his IQ is probably about 150)

      He’s not the only one I know like that. They are convinced they are moderate but if you try to discuss something with them, they get mad within 30 seconds.

    • jobeth says:

      Steve, I find the same personal conservatism among my democratic friends. My own parents who always voted democratic were the same way. Very conservative in their personal life.

      These are the people who don’t seem to read below the fold or are so focused on their own personal world they are unable to discern between empty promises and their consequences.

      They simply don’t look into the details of these grand plans. And as I said elsewhere…the progressives use all the right words to dress up their agenda so that it becomes palatable to these people who don’t hunt for facts. Who just run on headlines and soundbites and pretty language.

      In my parents…and my good friend’s case…they just don’t seem to get the fact that the Dems have been taken over by the progressive movement.

      We have to start to inform these folks with some reality and facts. The 2010 elections will be on us before we know it.

      Pro…”but if you try to discuss something with them, they get mad within 30 seconds.”

      Man, it that the truth. I think it comes from them knowing they don’t have facts to counter our comments. If they get mad, they can get out of the spot light. They won’t have to admit they don’t know what they are talking about. It’s easier that way.

    • JohnMG says:

      proreason: ……” (and his IQ is probably about 150)…..”

      Is this in “dog” IQ? That would only be about 21 in human IQ. ;-}

  5. crate says:

    Two words that burn me “social justice”

  6. NoNeoCommies says:

    The bi-polar personality of the left is very clear in the case of the two Liberals pictured at the head of the article.

    Ben and Jerry were all for restrictions on chemicals in our food at levels that were extremely difficult to reach.
    Someone decided to see if they even controlled their ice cream to the levels they supported.
    Their products failed to meet specifications for dioxin, which they stated was unsafe at any level.

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